Global financial institution Goldman Sachs has lowered its 2026 expectations for gold by $500. The firm previously expected the yellow metal to hit $5,400 in December of this year, but now anticipates it to trade at $4,900. Gold was trading at $4,166.25 as of writing, therefore, the bank’s prediction is still a bullish scenario from current levels. Let’s discuss why Goldman Sachs lowered its price target for the commodity.

Why Did Goldman Sachs Lower Its Price Target For Gold?

Goldman Sachs’ price revision comes after the Federal Reserve decided to keep interest rates unchanged amid rising CPI (Consumer Price Index) figures. Inflation in the US climbed to 4.2% in May 2026, higher than what many anticipated. The Federal Reserve’s new Chair Kevin Warsh highlighted that inflation is still beyond the Fed’s 2% target and prices are still very high. In fact investors may begin to price in a possible interest rate hike towards the end of this year.

Gold’s appeal shot up in late 2025 and early 2026 amid rising macro uncertainty and geopolitical tensions. The US-Iran conflict led to substantial disruptions in global energy supplies. Investors began flocking to gold as a safe haven in times of distress. Gold climbed to an all-time high of $5,626.80 in late January of this year.

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Since its January 2026 peak, gold’s price has faced a steep correction. The commodity has dipped by nearly 26% from its all-time high. There is also a chance that gold’s price could continue dipping over the coming weeks before seeing any positive price action. There have been some reports that the US-Iran peace deal did not go through due to Israel re-escalating tensions with Lebanon. If the deal fails we could see another financial crisis.