Gold at a Crossroads: Goldman Slashes Target, but Central Bank Buying and JPMorgan’s $6,000 Bet Offer Counterweight

Goldman slashes 2026 gold target to $4,900, JPM holds at $6,000 as Fed's hawkish stance delays rate cuts, but central bank buying provides floor.

The precious metals market is grappling with a rare split among the Street’s biggest forecasters. Goldman Sachs just lopped $500 off its year-end gold price target for 2026, bringing it to $4,900 an ounce, while J.P. Morgan stubbornly holds at $6,000 and UBS sits at $5,900. The fault line is the Federal Reserve — and specifically the hawkish turn under Chairman Kevin Warsh, whose policy stance has pushed rate-cut expectations deep into 2027.

Gold closed Friday at $4,103.70, managing a 1.54% daily gain but still nursing a near-8% monthly loss. The metal has fallen roughly 27% from its all-time high in January, and the relative strength index at 37.3 points to technical weakness without flagging outright oversold conditions. Goldman’s commodity strategists Lina Thomas and Daan Struyven captured the mood with a cautious formula: “Structurally constructive, tactically cautious.”

The Fed-driven headwind that changed the calculus

The central bank’s fresh inflation projection of 3.6% for 2026 has slammed the door on early rate cuts. Nine members of the Federal Open Market Committee now see room for additional hikes this year, and Goldman’s economists have moved their first expected easing step from late 2026 to the second half of 2027. The CME FedWatch Tool reflects the shift: a 61% probability of a September rate hike, down from 70% a week ago, but still a bearish signal for non-yielding assets.

A strong dollar — the DXY hovering near the 100 mark — adds further pressure by making dollar-denominated bullion more expensive for overseas buyers. That dynamic has crushed gold’s momentum despite a geopolitical backdrop that would normally fuel safe-haven flows, including the reopening of the Strait of Hormuz, which has relieved some of the risk premium embedded in energy markets and, by extension, precious metals.

Central banks keep stacking, defying the selloff

Yet beneath the surface, the physical market tells a different story. Global central banks added a net 244 tons of gold in the first quarter of 2026 alone, pushing total official reserves above 36,000 tons — the highest since 1975. Goldman estimates monthly purchases of around 50 tons worldwide, a steady bid that has prevented a steeper collapse. The metal now accounts for roughly 27% of official reserves, surpassing U.S. Treasuries at 22% for the first time in decades.

This structural demand is most visible in Southeast Asia, where physical bar premiums have actually risen even as the global paper price corrected. The decoupling suggests that local buyers view the selloff as a buying opportunity, insulating the market from a full-blown rout. J.P. Morgan’s $6,000 long-term target rests on this foundation, along with the view that central bank accumulation will persist as a hedge against sanctions risk and inflation.

Technical levels and the jobs test ahead

Gold has so far defended the $4,000 psychological threshold, bouncing from that zone last week. Resistance now sits between $4,200 and $4,400, while a break below $4,000 would open the door to the next support near $3,700 — a level that Goldman’s cautious near-term outlook acknowledges as plausible.

All eyes turn to the July 2 U.S. nonfarm payrolls report. A strong print would reinforce the hawkish Fed narrative and likely push gold toward the lower end of its range. A weaker number, by contrast, could revive talk of earlier easing and spark a relief rally. For now, the market remains caught between two powerful forces — the central bank hoarding that underpins the floor and the rate-hike cycle that caps the ceiling. As Goldman put it, the message for investors is to stay nimble: the structural case is solid, but the tactical headwinds are not yet spent.