Goldman Sachs Trims Gold Forecast as Fed Rate Cuts Recede

The bank’s commodity analysts, Lina Thomas and Daan Struyven, characterized their current outlook as structurally constructive yet tactically cautious. While the revised target remains above current market levels, the adjustment signals growing concern over persistent inflation and the Federal Reserve’s decision to hold rates between 3.50% and 3.75% during its June 17 meeting. With inflation remaining above the 2% target, the prospect of prolonged high rates diminishes the appeal of non-yielding assets like bullion.

This liquidity squeeze extends to the cryptocurrency market. Bitcoin has faced downward pressure as traders recalibrate for a "higher-for-longer" interest rate environment, which increases the opportunity cost of holding risk-on assets. As bond yields remain attractive, capital continues to flow into cash and dollar-denominated holdings. While geopolitical instability in Iran provides a potential floor for safe-haven demand, the immediate trajectory for both gold and Bitcoin remains tethered to the Federal Reserve’s timeline for easing policy.