Gold loses its luster – The nightmarish forecast by Macquarie until 2030

It was the ultimate investment haven of 2025, shattering one historical record after another and offering mythical profits to those who trusted it. However, the scene in the precious metals market is changing dramatically. Geopolitical shifts, aggressive moves by the Fed, and a shift of investors toward stocks seem to be putting a sharp "brake" on gold's explosive rally. The worst, however, is yet to come, with Macquarie predicting a continuous, nightmarish slide in prices that will last until 2030.

Eyes on the Fed

In an informative note, Macquarie's strategy analysts stated that all eyes are now turned toward the trajectory of inflation and whether central banks—particularly the Fed—will tighten their policy to keep prices under control. "The apparent end of the conflict in the Middle East, combined with a more hawkish Fed, caused a retreat in prices, as the attractiveness of gold as a safe haven wanes alongside the prospect of higher interest rates and a stronger dollar, with an increase in Fed interest rates in the fourth quarter now fully priced in," they stated. Markets are currently pricing in a Fed rate hike by September, according to the CME's FedWatch tool. Both the European Central Bank and the Bank of Japan raised rates this month in response to the energy shock of the war in Iran.

Macquarie noted that the first meeting of the new Fed chair, Kevin Warsh, had an "aggressive tone" and that, under his leadership, the central bank has the "potential to derail or support prices" in the gold market. "After the impact from the Middle East, which we expect to weigh on global growth until the third quarter, the eventual recovery of global growth and the monetary policy easing cycle are expected to lead gold prices to lower levels, as more investment capital will move out of precious metals," they noted. "Investors are locking in profits and turning toward stocks… This creates room for investors to re-enter the precious metals sector, thus pushing prices back up, but it will likely require a significant macroeconomic event to reignite interest."

Inflation pressures prices

Macquarie projects an average spot price for gold at $4,641 per ounce for 2026, a 35% annual increase, but expects that prices will fall by 9.5% to $4,200 in 2027 and will decrease every year until 2030. On Wednesday, it lowered its year-end spot gold forecast to $4,300, down from the previous estimate of $4,400. Profit-taking exerted pressure on silver prices last month, Macquarie stated, adding that "price action is once again being driven by macroeconomic factors amid rising expectations for a Fed rate hike." "As with gold, we expect prices to remain range-bound for the remainder of the current year before showing a gradual downward trend in 2027, with inflation-induced tensions and the possibility of Fed rate hikes limiting further upside," they noted. "The higher inflation and bond yields move, the greater the downward pressure will be. Especially for silver, the bullish sentiment of investors—fueled by tighter supply, low inventories, and strong demand—made its prices outperform gold, making it more vulnerable to a correction. And historically, silver corrects quickly." Macquarie expects silver to trade at $70 per ounce in the final quarter of this year, before falling to $65 per ounce by the end of 2027.

Gold remains in the game

Guy Adami, co-founder of RiskReversal Media, told CNBC that gold "remains in the game" despite facing a series of headwinds. "There was this rumor that central banks might sell [gold] at the start of the war; I have no confirmation or verification of that, but it was heavily talked about. And in a world where Micron adds $130 billion in market capitalization in after-hours trading, people are wondering: 'why should I bother with gold right now?'" he said. "I still think inflation is a problem. I believe interest rates will move higher. I understand the obstacles caused by the dollar, but at some point, I think everything will reverse and gold will become popular again," added Adami. Noting that gold has now fallen about 24% from its historical high, he said that it "doesn't make sense" to argue for a new gold rally.

"But I still believe central banks will continue to increase their positions and gold will remain in the game for the rest of the year," he stated to CNBC. The World Gold Council's annual survey of central bank gold reserves, published last week, found that central banks continue to see gold as a key hedge against inflation and geopolitical risks. Nearly 90% of respondents said they expect an increase in global central bank gold reserves over the next year. However, several Wall Street analysts have lowered their price targets for gold in recent weeks. OCBC strategy analysts stated in a note that intense pressures on gold prices remain after the break below $4,000, with price action becoming increasingly reconnected to real yields. "Even if the medium-term positive scenario remains strong, the recent aggressive Fed rhetoric and the environment of higher real interest rates argue for a more cautious stance on gold in the short term," they stated. "Until real yields retreat, ETF liquidation slows, or aggressive Fed rhetoric eases, upside moves may remain vulnerable and fade."

www.bankingnews.gr