SKN | HSBC Lowers Average Gold Forecast While Maintaining Bullish Long-Term Outlook

Key Takeaways:

• HSBC lowered its 2026 average gold price forecast to $4,560 per ounce from $4,864 while maintaining its year-end target of $4,750.
• The bank cited expectations for tighter U.S. monetary policy and a stronger U.S. dollar as key factors behind the revised near-term outlook.
• HSBC continues to see structural support from central bank purchases, fiscal deficits, sovereign debt concerns, and long-term reserve diversification.

HSBC Adjusts Near-Term Gold Expectations

HSBC has reduced its average gold price forecast for 2026, lowering its projection to $4,560 per ounce from $4,864 previously, while trimming its 2027 average forecast to $4,925 from $5,000. Despite the revisions, the bank maintained its year-end targets of $4,750 for 2026 and $5,025 for 2027, signaling continued confidence in gold’s longer-term recovery.

The revised outlook reflects changing expectations for U.S. monetary policy rather than a fundamental shift in the bank’s long-term investment thesis for the precious metal.

Stronger Dollar and Higher Rates Pressure Gold

According to HSBC, expectations that the Federal Reserve may maintain a more restrictive monetary policy have strengthened the U.S. dollar and increased the opportunity cost of holding non-yielding assets such as gold. These developments have contributed to recent liquidation across gold markets and weighed on prices following January’s record highs.

The bank now expects gold to trade within a range of $3,800 to $4,700 per ounce through the remainder of 2026 before recovering toward its year-end target.

Long-Term Structural Drivers Remain Intact

While the average forecast was lowered, HSBC did not alter several key assumptions supporting its longer-term outlook. The bank continues to project robust central bank gold purchases, forecasting approximately 680 tonnes of official sector demand during 2026 and 850 tonnes in 2027.

HSBC also expects structural drivers including rising fiscal deficits, elevated sovereign debt burdens, reserve diversification by central banks, and ongoing geopolitical uncertainty to continue supporting gold over the longer term. The bank noted that while geopolitical developments may generate short-term volatility, they are unlikely to permanently alter gold’s long-term trajectory.

Policy Decisions Will Shape the Next Move

Near-term price direction is expected to depend largely on upcoming U.S. inflation data and future Federal Reserve policy decisions. Softer inflation readings could reduce expectations for additional monetary tightening, easing pressure on gold by lowering real interest rates and weakening the U.S. dollar.

Market participants will closely monitor upcoming inflation reports and Federal Open Market Committee meetings for further indications regarding the path of U.S. interest rates.

Outlook

HSBC’s revised forecasts represent a moderation in near-term expectations rather than a reversal of its constructive long-term view. While tighter monetary policy and dollar strength continue to create headwinds, the bank believes structural demand from central banks, fiscal challenges, and global reserve diversification should continue supporting gold over the coming years. Investors are likely to remain focused on inflation trends, Federal Reserve policy, and macroeconomic developments as the primary catalysts for the precious metal during the second half of the year.

For a confidential discussion regarding precious metals strategy, commodity market trends, inflation hedging, or global macroeconomic investment opportunities, contact our senior advisory team.