HSBC lowers 2026-27 gold price forecasts on hawkish Fed tilt

July 9 (Reuters) – HSBC cut its average gold price forecasts for 2026 and 2027 on Thursday, citing a hawkish shift in U.S. monetary policy ​expectations and a stronger dollar.

The bank lowered ‌its 2026 average gold price forecast to $4,560 per ounce from $4,864 and its 2027 forecast to $4,925 from $5,000. It said gold could trade between $3,800 and $4,700 for the rest of 2026 and end the year ‌at $4,750, ​while its 2027 year-end forecast ⁠was $5,025.

Spot gold was trading ⁠around $4,100 as of 0730 GMT, down more than 20% from the record $5,594.82 hit on January 29, as the Middle East conflict stoked concerns about inflation and ​prompted a more hawkish shift in the Federal Reserve’s monetary outlook.

“Changing perceptions of U.S. monetary policy and ⁠the impact this had on ⁠the dollar are among the central reasons ​behind further gold liquidation and price declines,” HSBC said.

HSBC said ​central bank buying had moderated after helping drive ‌gold’s rally in recent years, though long-term diversification could still support prices.

Heavy exchange-traded fund outflows seen in the first half may partly reverse in the second half, ⁠it added.

Despite the cuts to forecasts, HSBC said downside risks might be limited as much of the market had already ⁠adjusted to ‌a stronger-dollar, higher-rate environment.

The bank argued that ⁠some of the factors supporting gold ​before the ‌Middle East conflict, including fiscal deficit ​concerns, economic ⁠uncertainty and sovereign debt burdens, remained in place.

The conflict still has the “power to send gold lower, but we do not believe Iran-related declines by themselves would be long lasting,” HSBC said.…Read more by Thomson Reuters