Gold is expected to protect investors when markets become uncomfortable.
The problem is that the forces driving people toward safety can also make owning the metal a lot more painful.
Higher oil prices can revive inflation fears, rising bond yields make income-producing assets more attractive, and a stronger dollar raises the cost of gold for overseas buyers. Those pressures have compelled Wall Street to effectively reconsider how swiftly the bullion can resume its climb.
According to TheFly, HSBC is the latest major bank to adjust its expectations, slashing its 2026 average gold forecast while reducing its 2027 estimate as well.
Consequently, investors are no longer deciding whether gold has a compelling long-term story. Instead, they are deciding how much choppiness they might have to absorb before that story pays off.
HSBC lowered its gold forecasts while keeping its long-term outlook constructiveJUNG YEON-JE / Getty Images
HSBC trims gold again, but the bull case is not broken
HSBC has recalibrated the path for gold prices again.
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On October 1, the bank lowered its 2026 average gold price forecast to $4,490 per ounce from $4,560, while cutting its 2027 average to $4,825 from $4,925. That follows a broader July reset, when HSBC had already reduced its 2026 average from $4,864 and its 2027 estimate from $5,000.
The size of the latest revamp is pertinent. A $70 cut to 2026 and a $100 reduction to 2027 suggest HSBC is becoming more cautious about the durability of the rally, but not dramatically more bearish.
The bank also said gold could face additional near-term pressure as it approaches a potential floor, with central bank buying expected to strengthen if bullion moves toward or below $4,000.
An important point to consider, though, is that $4,490 is an annual average forecast, not a year-end target. HSBC’s previously published July year-end 2026 target was $4,750 as reported by Reuters.
So in essence, HSBC sees a tougher road ahead, but still expects structural demand to limit how far gold ultimately falls.
Why gold is still holding above $4,000 despite a tougher backdrop
For investors, perhaps the most unusual part of gold’s recent pullback isn’t simply that prices have fallen. It is that bullion has remained relatively resilient even as several of its traditional headwinds have intensified at once.
Gold entered 2026 after surging 64% in 2025, its strongest annual gain since 1979, as reported by USFunds, then climbed to a record near $5,595 on January 29. The rally later fractured. After another strong start to the year, gold reversed through the spring, rebounded 13% in August to $4,563, then fell roughly 6.6% in September.
By October 2, spot gold was near $4,140, more than 20% below its January peak, while the 10-year Treasury yield had recently reached about 5.34% and the dollar remained firm.
What stands out to me is that even softer economic data has not been enough to restore the rally. September payrolls rose by just 29,000, lowering expectations for another near-term Fed hike, yet long-term yields remain elevated as investors weigh fiscal pressure, energy-driven inflation, and heavy borrowing.
That leaves gold caught between two forces: cyclical pressure from yields and the dollar, and structural demand from central banks and investors worried about fiscal credibility.
Wall Street still likes gold, but the path to $5,000 is getting harder
Across Wall Street, the broader pattern is perhaps a lot more nuanced, where we’re seeing banks trimming or reshaping the path higher without abandoning the longer-term bull case.
Goldman Sachs still sees $4,900 by year-end 2026, while UBS is looking for roughly $4,600 in December, followed by $5,000 in March 2027, Deutsche Bank is also at $5,000, and Morgan Stanley sees gold moving above that level in 2027.
Moreover, Wells Fargo offers a useful reality check.
It cut its 2026 year-end range to 4,900-5,100 from 5,300-5,500, marking another downward revision this year. To me, that says analysts are becoming less confident about the speed of the rally, not necessarily its destination.
Bank of America makes that change even sharper.
In the September 30 metals report I covered, BofA sees gold averaging about $4,000 in Q4, with prices potentially falling toward $3,750 before recovering to quarterly averages of $5,000 in parts of 2027.
The risk is oil.
Since crude moved above $90 in August, BofA tracked an 8.3% drop in gold, alongside higher yields and a stronger dollar. Its stress case is harsher: if oil reached $150, gold could average roughly $3,500 in 2027.
I think that is the key takeaway for investors.
Wall Street remains structurally bullish on gold, but increasingly acknowledges that inflation, yields, and positioning could make the journey to $5,000 far less direct.
Related: Goldman Sachs sees big change coming for interest rates