Goldman Sachs has recently lowered its year-end 2026 gold price forecast by $500 per ounce, as the Federal Reserve is not expected to cut interest rates again this year.
Analysts Lina Thomas and Daan Struyven stated in a report that they have revised their December gold price target down to $4,900 per ounce.
This adjustment suggests that gold prices are still anticipated to rise in the second half of the year, though the expected gains are now more modest than previous forecasts.
The analysts noted that their outlook for gold remains structurally constructive but tactically cautious, with short-term downside risks balanced by medium-term upside potential.
In recent years, this Wall Street giant has been among the most steadfast and vocal bull voices in the gold market, having accurately predicted a significant rally after advising investors to "buy gold boldly" at the end of 2024.
The current revision to its price target marks a subtle shift in the firm's tone.
In other news, Bank of Japan Deputy Governor Himino reinforced the central bank's commitment to continue raising interest rates in a public speech last Friday, while sending a clear signal on the yen's exchange rate that market participants found hard to ignore.
Himino indicated that the BoJ expects to keep lifting rates based on economic, price, and financial developments, with the pace and timing of hikes to be adjusted flexibly according to the probability of the baseline scenario and associated risks.
He also pointed out that underlying inflation is nearing 2%, but there is a risk of overshooting the target—not due to temporary energy price spikes but because of a more lasting change in price-setting behavior.
This distinction is crucial and echoes concerns from the April meeting minutes that Japan is gradually moving away from a deflationary mindset, making the economy more sensitive to cost pressures than in past cycles.
Data to watch today include Canada's May unadjusted CPI annual rate and the preliminary reading for the Eurozone's June Consumer Confidence Index.
Gold/US Dollar
Gold experienced a slight decline last Friday, closing lower on the day and currently trading around 4,195.
The primary pressure came from strengthening expectations for Federal Reserve interest rate hikes.
Additionally, Goldman Sachs' downward revision of its gold price forecast contributed to the downward pressure.
However, the easing of tensions in the Middle East limited the extent of gold's retreat.
Resistance is anticipated near the 4,250 level today, with support seen around 4,150.
US Dollar/Japanese Yen
The USD/JPY pair consolidated with a marginal loss last Friday and is currently trading near 161.60.
Profit-taking exerted some downward pressure on the pair, alongside a reduction in safe-haven demand for the US dollar due to the de-escalation in the Middle East.
Concerns over potential renewed intervention by Japanese authorities in the currency market and expectations for Bank of Japan rate hikes also weighed on the pair.
Resistance is eyed near 162.50 today, with support around 160.50.
US Dollar/Canadian Dollar
The USD/CAD pair edged higher last Friday, posting a modest gain and currently trading around 1.4190.
Support was provided by the firming outlook for Fed rate hikes, coupled with weaker-than-expected Canadian economic data released during the session.
Nevertheless, a pullback in the US dollar index, which closed lower, capped further gains for the pair.
The 1.4300 area is viewed as a key resistance level today, with support located near 1.4100.
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