HSBC Trims Near-Term Gold Forecasts, Sees Rally Resuming on Structural Risks

HSBC has lowered its near-term price forecasts for gold following a significant pullback from record highs, but the bank's analysts expect the rally to resume, supported by persistent fiscal and geopolitical risks.

Forecasts Revised Amid Price Pullback

HSBC reduced its average gold price forecast for 2026 to $4,560 an ounce from a previous estimate of $4,864. The bank also trimmed its 2027 forecast to $4,925 from $5,000. Long-term forecasts for 2028 and 2029 remain unchanged at $5,200 and $5,300, respectively.

The revisions follow a sharp decline in the price of bullion, which fell from a record high of $5,450 an ounce on January 30 to a 2026 low of $3,942 on June 30. According to the report, the precious metal came under pressure from a hawkish policy stance signaled by new Federal Reserve Chair Kevin Warsh, which bolstered the U.S. dollar and expectations for interest rate hikes.

Structural Tailwinds Remain Intact

Despite the near-term downgrade, HSBC chief precious metals analyst James Steel said he retains "a positive posture" on gold. The report argues that underlying structural factors that previously drove prices higher, such as "ongoing fiscal profligacy" in the U.S. and other nations, will resurface to support gold’s safe-haven appeal.

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Central bank demand is also expected to be a major catalyst. While high prices led to a moderation in official sector purchases in 2025, HSBC anticipates demand will pick up later this year, forecasting 680 tonnes of purchases in 2026 and 850 tonnes in 2027. The bank also noted that heavy liquidations from gold-backed exchange-traded funds (ETFs) could partially reverse as these structural themes reassert themselves.

Headwinds from Demand and Strong Dollar

HSBC acknowledged several headwinds that could cap the extent of a price rally. A firm U.S. dollar, as forecast by the bank's foreign exchange team, is expected to limit gold's upside potential.

On the physical demand side, the report noted several trends:

• Jewelry Demand: High prices are "sharply eroding" demand in key consumer markets, leading HSBC to cut its 2026 forecast to 1,377 tonnes from 1,550 tonnes.
• Bar & Coin Demand: Demand for gold bars remains strong, particularly from institutional investors in Asia, while demand for coins may be approaching a bottom after recent declines.