HSBC cuts 2026 gold price forecast to $4,560 per ounce

Spot gold hovered around $4,100 per ounce on Tuesday, a more than 20% drop from the $5,594.82 record set on Jan. 29, while HSBC trimmed its 2026 price forecast to $4,560 per ounce, down $304 from its prior estimate. The bank warns that a stronger U.S. dollar and higher real yields have pressured the metal, but cites lingering fiscal deficits and sovereign debt concerns as tailwinds for a longer‑term rally.

Forecast revision and market backdrop

HSBC’s Global Chief Investment Officer Willem Sels and Head of Wealth Insights Lucia Ku said the bank now expects gold to trade in a $3,800‑$4,700 range for the rest of 2026, with an end‑year level near $4,750, and to finish 2027 at about $5,025 per ounce【1】. The downgrade reflects “changing perceptions around U.S. monetary policy” and a “strengthening U.S. dollar,” which have prompted investors to liquidate gold holdings【1】. Meanwhile, central‑bank purchases that helped buoy the metal in recent years have moderated, though HSBC notes that long‑term reserve diversification could still underpin prices【1】.

Structural risks and upside potential

Despite the lower forecasts, HSBC argues that downside risks are limited because markets have already priced in a higher‑interest‑rate environment. The bank points to “widening fiscal deficits, economic uncertainty and elevated sovereign debt levels” as structural factors that could sustain demand for gold as a safe‑haven diversifier【1】. It also expects “steady ETF inflows” and continued central‑bank buying to provide medium‑term support, even as heavy outflows from gold‑backed ETFs in H1 may reverse in H2【1】. The note adds that geopolitical tensions, particularly around Iran, could keep gold volatile in the near term but are unlikely to drive a sustained decline【1】.

Market sentiment and near‑term outlook

Gold’s price action has been range‑bound between $3,900 and $4,200, with little momentum to break above $4,200, as elevated real yields and a firm dollar dampen bullish sentiment【2】. Nonetheless, HSBC’s analysts maintain that the metal could “shoot up by the end of the year” thanks to portfolio‑diversification demand and central‑bank buying【2】. The bank’s view contrasts with the recent 1% dip in gold, indicating that short‑term price pressure may give way to a rally if the structural drivers hold.

What to watch

• U.S. CPI and core inflation releases in the next two weeks, which could shift expectations for Fed policy and impact real yields.
• Central‑bank gold purchase data, especially from major holders such as China and Russia, for signs of continued diversification.
• The outcome of any U.S.–Iran diplomatic developments, which could reignite safe‑haven demand and test the metal’s near‑term support levels.

HSBC’s revised forecasts suggest that while gold’s near‑term price may remain subdued, the combination of fiscal strain, sovereign debt concerns and potential geopolitical flashpoints could set the stage for a renewed rally later in the year. The key question is whether the structural risks outweigh the headwinds from a strong dollar and higher yields.