Gold Is Up 4% Since Midterms: Here’s Where Markets Think The Precious Metal Prices Are Headed

Goldman Sachs slashed the price target on gold, but economist Peter Schiff believes the yellow metal has more room to run.

• Goldman Sachs lowered its gold price forecasts for year-end 2026 to $4,150 an ounce from $4,650, and the year-end 2027 forecast to $4,800 from $5,400. 
• The bank’s strategists, led by Lina Thomas, cited the hawkish shift in the Federal Reserve’s stance in recent months and its effect on investor positioning for the lower target. 
• However, Schiff believes a Democratic-controlled Congress means increased government spending, more regulation, larger budget deficits, and higher inflation, which would be bullish for gold. 

Gold and silver have found fresh momentum following the U.S. midterm elections, with spot gold up about 4% and spot silver up more than 5%, but investors are getting mixed signals about how much room is left for precious metals to rally further. 

While Goldman Sachs has lowered its gold price targets last week, citing a hawkish Federal Reserve, economist Peter Schiff sees bigger government spending, widening deficits and inflation as catalysts for another leg higher.

Spot gold was trading at $4,055.35 an ounce at the time of writing, while spot silver was $53.32 an ounce. 

Goldman Slashes Gold’s Price Target

Last week, Goldman Sachs lowered its gold price forecasts for year-end 2026 to $4,150 an ounce from $4,650, and year-end 2027 forecast to $4,800 from $5,400. 

According to a report from Investing.com, the bank’s strategists led by Lina Thomas cited the hawkish shift in the Federal Reserve’s stance in recent months and its effect on investor positioning for the move. However, they maintained a constructive longer-term view tied to strong central bank buying.

The analyst said that the current setup for the precious metal increasingly resembles 2022, when central banks provided a strong structural bid but higher interest rates weighed on investor positioning, resulting in modest pace of price gains.

Goldman said that central bank demand still remains the primary support for gold, with an expectation of purchases of 60 tonnes a month through 2026 and 2027. 

"We retain our longer-term constructive view on structurally strong central bank demand – which drives most of the 15% price upside we forecast by end-2027," the strategists said, as per the report.

The investment bank added that the conversation is now shifting from whether to own gold to where to store it, pointing to broader concerns around reserve security and cross-country trust. Goldman expects further price support once the Fed starts cutting rates in the second half of 2027, adding that higher oil prices could add further pressure through systematic selling.

Goldman Sachs also forecasts further downside risk if the Federal Reserve hikes interest rates again in March 2027, delays cuts or raises its terminal rate. In that scenario, it estimates gold would reach $4,660 by the end of 2027, it said.

Economist Sees Further Upside

However, Schiff believes that the market is bullish for gold. In a post on X, the long-term gold bull said, “With all of the major stock market indexes lower this week, the standout winners were precious metals mining stocks. The $GDX surged 9.6%. This is a sign of things to come. A sharp turn to the left, and the higher inflation that will result, will be extremely bullish for gold.”

In a separate post over the weekend, he said, “A Democratic-controlled Congress in 2027 and a Democrat in the White House in 2029 mean increased government spending, more regulation, larger budget deficits, and higher inflation. This is bullish for gold, which is about to rise above $4,100. Buy it now!”

What Does Retail Think?

The SPDR Gold Shares ETF (GLD) was up nearly 1.5% in the overnight session late Sunday at the time of writing. Retail sentiment on Stocktwits was ‘neutral.’

Meanwhile, the iShares Silver Trust (SLV) was up more than 2% at the time of writing amid ‘bullish’ sentiment. 

One bullish user said, “$GLD and $SLV boom.”

Another user said, “$GLD and $SLV gold and silver flying huge today.”

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