TLDRGoldman Sachs lowered its year-end gold price target from $5,400 to $4,900 per ounce.The bank expects the Federal Reserve to delay interest rate cuts until March and December 2027.Analysts Lina Thomas and Daan Struyven maintained a constructive long-term view on gold despite near-term risks.Gold has fallen more than 22% from its January record high of $5,327 per ounce.Bitcoin has declined 28.3% since January as markets reassess interest rate expectations.Goldman Sachs reduced its year-end gold forecast by $500 per ounce after revising its outlook for U.S. interest rates. The bank now expects the Federal Reserve to delay rate cuts until 2027, which has reshaped its short-term view on gold prices. The revised projection also comes as gold and Bitcoin continue trading below their January peaks.Goldman Sachs Revises Gold Outlook After Fed Rate ShiftGoldman Sachs lowered its year-end gold target to $4,900 per ounce from $5,400. The bank based the change on expectations that the Federal Reserve will keep rates unchanged through 2026.Commodity analysts Lina Thomas and Daan Struyven outlined the updated view in comments reported by Bloomberg. They said, “Our gold price views remain structurally constructive but tactically cautious, with near-term downside risk and medium-term upside risk.”The revised forecast assumes the next Federal Reserve rate cuts could arrive in March 2027 and December 2027. As a result, Goldman Sachs adjusted its short-term expectations for bullion prices.Gold traded more than 22% below its January record high of $5,327 per ounce. According to GoldPrice data, the metal stood only $135 above the $4,000 level.Higher interest rates often reduce demand for non-yielding assets. Therefore, traders may favor bonds or cash when rates remain elevated.Market participants had previously expected earlier policy easing from the Federal Reserve. However, stronger inflation data has pushed those expectations further into the future.Bitcoin Declines as Markets Reassess Monetary PolicyBitcoin also faced pressure as investors adjusted to the changing interest-rate outlook. The cryptocurrency has fallen 28.3% since January, according to market data.Lower interest rates often support demand for risk assets, including cryptocurrencies. However, expectations for prolonged higher rates have weighed on sentiment across digital asset markets.The conflict involving Iran has also coincided with weakness across several financial markets. At the same time, traders continue assessing inflation trends and monetary policy signals.Last week, analysts pointed to fresh challenges for both Bitcoin and gold. They cited a 4.2% annual increase in the U.S. Consumer Price Index for May.Rising inflation can complicate central bank decisions on interest rates. Consequently, markets have reduced expectations for near-term policy easing.Tim Sun, senior researcher at HashKey Group, discussed the current environment. He said, “Only when inflation drops, rate cuts become viable, and liquidity improves alongside lower capital costs, will the overall risk appetite truly reverse.”CME Group’s FedWatch Tool reflects expectations for policy stability through the remainder of 2026. Current projections show a strong probability that rates will stay at or above the existing 3.5% to 3.75% range.The latest FedWatch data continues to indicate limited expectations for rate reductions before 2027. Those projections formed part of the backdrop for Goldman Sachs’ revised gold forecast.The post Goldman Sachs Trims Gold Forecast as Higher Rates Persist appeared first on Blockonomi.