① Goldman Sachs has kept its year-end 2027 gold price target unchanged at $5,400 per ounce. The firm stated that monetary tightening may slow the rise in gold prices but will not derail it; ② UBS Group also noted that, despite the Federal Reserve's recent rate hike decision putting short-term pressure on gold, the bank remains constructive on gold's outlook over the next 12 months.
Despite the Federal Reserve's "hawkish rate hike" on Wednesday, major international banks such as Goldman Sachs and UBS Group continue to maintain a long-term bullish outlook on gold.
Goldman Sachs recently kept its gold price target for the end of 2027 unchanged at $5,400 per ounce. The firm stated that monetary tightening may slow the rise in gold prices but will not derail it.
On Wednesday, the Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75%–4.00%, citing solid economic activity, resilient consumer spending, and persistently high inflation. This marked the central bank's first rate hike in more than three years and signaled that further increases are likely in the months ahead. The latest dot plot indicates that 16 out of 18 policymakers expect at least another 25-basis-point hike by year-end.
Goldman Sachs recently abandoned its forecast of a "one-time rate hike" by the Federal Reserve and now expects the central bank to raise rates again in October.
Typically, higher interest rates tend to curb demand for non-yielding assets, such as gold, by making interest-bearing assets more attractive.
Driven by a weaker U.S. dollar and falling oil prices, international gold prices rose on Friday, up 1.27% as of press time, approaching the $4,400 per ounce mark.
UBS Group: Holds a constructive outlook on the 12-month gold price outlook.
Coincidentally, UBS Group also stated recently that, despite the Federal Reserve's recent interest-rate hike putting short-term pressure on gold, the bank remains constructive on gold's outlook over the next 12 months, with key supporting factors including rising global fiscal deficits and expectations of a weaker U.S. dollar.
UBS Group forecasts that by December 2026, the gold price will reach $4,600 per ounce, rise to $5,000 by March 2027, hit $5,200 by June 2027, and climb to $5,400 by September 2027.
UBS Group strategist Giovanni Staunovo described the Federal Reserve's rate hike on Wednesday as "a hawkish move that ended its long pause."
Staunovo noted that the current environment "continues to weigh on gold in the short term," as rising U.S. real yields and a stronger dollar increase the opportunity cost of holding the non-yielding asset. He added that, despite strong inflows into gold ETFs in August amid market concerns about the Federal Reserve's independence and rising debt levels, some capital may choose to pull out following hawkish signals from this week's meeting.
Despite short-term pressures, Staunovo noted that this rate decision had long been widely anticipated and does not undermine gold's long-term investment appeal. The strategist pointed out that rising global debt levels, expectations of a prolonged U.S. dollar weakness, and the possibility of Fed rate cuts next year all serve as key supports for investor demand; moreover, geopolitical uncertainty is another contributing factor.
Central bank demand remains a key pillar supporting gold prices. Staunovo said he expects annual gold purchases by central banks to reach 750 to 1,000 metric tons, providing "significant structural support" for the metal's price.
He also noted that gold's resilience during periods of rising real interest rates suggests that conventional rate‑based valuation models "capture only part of the picture."
Concerns about the accessibility of reserve assets, sanctions risks, and fiscal sustainability are prompting policymakers to gradually reduce their reliance on U.S. dollar‑denominated holdings, while gold—being an asset unlinked to any institutional credit—sees its demand strengthened.
"We believe the long-term investment outlook for gold remains positive," Staunovo wrote, adding that a pullback in gold prices toward $4,000 per ounce "presents an opportunity to increase exposure."