Gold's Forecast Tweaked — HSBC Slashes Average but Holds Year-End Target
By John Nada·Jul 10, 2026·3 min read
HSBC cuts 2026's average gold forecast but holds year-end target. Fiscal pressures and central bank demand remain key supports.
HSBC has cut its 2026 average gold forecast by $304, but intriguingly left its year-end target unchanged at $4,750, according to GoldSilver.com. This adjustment came amidst changes in U.S. monetary policy perceptions and their impact on the dollar, which HSBC cited as central to gold liquidation and price declines. On July 10, gold was trading near $4,103 an ounce, down about 0.5% on the day and some 27% below the January high of $5,589.38. James Steel, the bank's Chief Precious Metals Analyst, noted this while also maintaining a 2027 year-end target of $5,025.
But why hold the year-end target steady? The unchanged view suggests HSBC expects a recovery, forecasting gold to trade between $3,800 and $4,700 through 2026 before closing near $4,750. This stability points to enduring structural supports like fiscal deficits and sovereign debt pressures, not to mention central bank demand, which Steel expects to remain strong. HSBC did not revise its central bank demand forecast, which held at 680 tonnes for 2026 and 850 tonnes for 2027.
The timing of this adjustment rather than a reversal of the gold thesis is crucial. What's more, other big names, like Bank of America, have mirrored HSBC's move, trimming near-term numbers while maintaining a strong structural outlook. This suggests the path to higher prices might be rocky, yet the destination remains the same. The structural forces that drove gold from around $2,600 in late 2024 to a January 2026 record — fiscal deficits, central bank diversification away from US Treasuries, and the de-dollarization trend — remained explicitly in HSBC’s reasoning as future supports.
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The bank now expects gold to spend time near current levels before recovering. Specifically, HSBC did not revise its central bank demand forecast. Steel said heavy gold ETF liquidation from the first half of 2026 may partially reverse in the second half as structural supports reassert themselves. The analyst was also explicit that the current conflict is not a permanent headwind, indicating that the downside risk may be more limited than the headline cut implies.
Looking ahead, pivotal data points such as the upcoming June CPI report on July 14 and the FOMC meeting at the end of the month could determine whether gold tests the higher or lower end of HSBC's forecast range. A cooler CPI reading might diminish September rate hike expectations, lowering gold's opportunity cost and supporting HSBC's recovery scenario. The July 28–29 FOMC meeting is the second date on the clock, with markets currently pricing roughly even odds of a September hike according to CME FedWatch data.
HSBC’s year-end forecast remains significant, with a target of $4,750 — about 16% above where gold trades today. The consistent message from multiple institutions, that the path to higher prices has become harder but the direction has not changed, reinforces the belief that gold's role as a safe haven asset remains intact amid ongoing fiscal and geopolitical challenges.