The bank now projects gold to average $4,300 per ounce in the third quarter of 2026, a 22% drop from previous estimates. While the forecast nudges up to $4,800 for the final quarter, it remains 17% below earlier projections. These figures hinge on the assumption that the Federal Reserve will maintain current interest rates throughout the year. Should the central bank opt for three or four additional rate hikes, Hsueh warns the price could slide as low as $3,800.

This revision marks a sharp departure from the bank’s mid-April outlook, which anticipated prices reaching the $6,000 range driven by fiscal deficit concerns and de-dollarization trends. Current market sentiment is hampered by steady outflows from gold-backed exchange-traded funds and a lack of support from mainland Chinese imports. While central bank demand remains a solitary pillar of strength, the broader investor rationale for precious metal allocations faces mounting pressure from a stronger-than-expected U.S. macro environment.