Gold's 25% Slide Spurs Bank Forecast Cuts: ING, JPM Lower

Investment banks and rating agencies have lowered their gold price forecasts after the metal shed over 25% from its January 29 record high of $5,608 an ounce. Gold traded near $4,053 on Friday, down 9% month-on-month and 2% from a week ago.

ING Think, the economic analysis arm of ING (Alpha Score 75/100, Strong), cut its Q3 2026 forecast to $4,300/oz and Q4 to $4,600/oz, down from $4,850 and $5,000 previously. BMI, a Fitch Solutions unit, now sees a 2026 average of $4,600/oz, citing Fed policy signals. J.P. Morgan lowered its Q3 view to $5,300/oz and Q4 to $6,000/oz, from $5,900 and $6,300.

The downgrades reflect a market repricing of interest rate expectations. The Federal Reserve held rates at 3.5-3.75% at its June 16-17 meeting but signaled possible hikes later in 2026. Higher yields and a stronger dollar have weighed on gold, which carries no yield. “Rising yields and a stronger dollar triggered profit-taking, particularly among North American investors, leading to a reversal in ETF flows,” said Ewa Manthey, commodities strategist at ING Think.

Gold’s technical picture shows a standoff. The metal is trudging above its 200-day moving average around $4,340 but capped below the 50-day moving average at $4,730/oz, according to Greg Shearer, J.P. Morgan’s head of base and precious metals. He described gold as stuck in a “no-man’s land” until a catalyst breaks the range.

The Iran war, which began in late February, initially boosted gold but the boost faded as markets focused on the implications of higher interest rates. Shearer said the conflict “reinforces many of the themes driving demand for diversification into gold,” but those themes are on hold until there is clarity around a resolution.

Central bank buying, a key driver of gold's rally since 2024, appears to have cooled on the surface, though China has reportedly made unreported purchases, Shearer noted. ETF investors, a major force behind the early-year surge, shifted sentiment after March, reassessing the monetary policy outlook.

The most salient risk to lower forecasts, per J.P. Morgan, is a macro scenario where U.S. growth and employment stay buoyant and inflation accelerates, solidifying a Fed hiking cycle. Conversely, if the US-Iran agreement keeps conflict-related inflation pressures fading, the Fed may hold rates steady, as BMI expects.

For traders watching gold, the immediate technical zone is the $4,340–$4,730 range. A break above the 50-day MA would signal near-term momentum shift; a drop below the 200-day MA could open a deeper slide. The next Fed meeting and monthly employment reports will drive the next leg.