HSBC Lowers Gold Forecast as Bank of America Warns of Drop Below $4,000

HSBC lowered its average gold price forecast for 2026 to 4,490 US dollars per ounce down from 4,560 US dollars, as reported by finanzen.net.

HSBC reduces yearly forecast figures

The British bank adjusted its expectations at the start of October 2026, lowering the 2026 yearly average from 4,560 to 4,490 US dollars per ounce. Gold recently traded around 4,170 US dollars per ounce, marking a drop of roughly a quarter from its record high of 5,595 US dollars reached on January 29, 2026.

This adjustment follows a larger cut in July 2026, when HSBC lowered its 2026 average from 4,864 US dollars and its 2027 estimate from 5,000 US dollars. The bank noted that 4,490 US dollars represents an annual average rather than a year-end target, which was set at 4,750 US dollars in July.

Bank of America warns of deeper fourth quarter slide

The Bank of America issued a considerably gloomier outlook for the final quarter of 2026, projecting an average price of around 4,000 US dollars per ounce and indicating that a drop down to 3,750 US dollars remains possible. Investor demand has increased but currently only supports a level near 4,000 US dollars, requiring significantly higher inflows to reach prices closer to 5,000 US dollars amid ongoing conflict with Iran.

The central risk involves market positioning, as many participants continue betting on later price gains despite mounting downward pressure. Crude oil prices serve as a primary lever for the metal, with gold losing 8.3 percent since crude oil climbed above 90 US dollars per barrel in August 2026. In a stress scenario where oil reaches 150 US dollars, the Bank of America estimates gold could fall to an average of roughly 3,500 US dollars in 2027.

Global gold market trends to watch

HSBC anticipates that central bank buying will accelerate if gold prices move toward or below 4,000 US dollars. However, that institutional support is not guaranteed after central banks became net sellers in March 2026 as rising oil prices pressured the currencies and current accounts of energy-importing nations.

During the second quarter of 2026, central banks led by Turkey offloaded approximately 60 tonnes of gold. Analysts at the Bank of America suggest this pattern could repeat if retail investors simultaneously divest from gold exchange-traded funds.

At the same time, broader economic indicators continue to pressure the non-yielding metal. The United States economy added only 29,000 nonfarm jobs in September 2026, softening expectations for near-term Federal Reserve interest rate hikes. Long-term yields remain elevated, with the ten-year US Treasury yielding about 5.34 percent at the beginning of October 2026 alongside a firm US dollar.

Market forecasts for the $4,000 gold test

Despite near-term caution, other major financial institutions maintain higher long-term targets while adjusting their timelines. Goldman Sachs projects gold at 4,900 US dollars by the end of 2026, while UBS expects around 4,600 US dollars in December and 5,000 US dollars in March 2027. Deutsche Bank maintains a 5,000 US dollar target, and Morgan Stanley anticipates prices above that threshold in 2027. Wells Fargo narrowed its late-2026 target range from 5,300 to 5,500 US dollars down to 4,900 to 5,100 US dollars.

The 4,000 US dollar threshold stands as the next reliable test for the market, where HSBC’s expectation of renewed central bank buying intersects with the Bank of America’s warning of rapid position unwinding.