Gold falls 0.6% to $4,063.39 as Goldman Sachs cuts its forecasts
Key Facts
Spot gold fell 0.6% to $4,063.39 an ounce by 02:48 GMT on November 6, while December futures dropped 1% to $4,072.90, according to Reuters. The move came after Goldman Sachs cut its end-2026 gold price forecast, citing the Federal Reserve’s more hawkish stance in recent months. The decline left the metal up 4% for the week as of Friday morning. Meanwhile, markets awaited the U.S. jobs report, with traders pricing in the possibility of an interest-rate hike in December. Gold’s decline in a session marked by a sharp sell-off in stocks reflects how inflation and liquidity pressures may temporarily outweigh its safe-haven appeal.
Reuters linked the pressure on gold to rising oil prices, which climbed more than 1% on Friday despite being on track for a sharp weekly decline. Oil’s rebound raised inflation concerns and strengthened expectations that interest rates would stay higher for longer. That prospect increases the cost of holding gold, which yields no income, compared with assets that benefit from higher returns. Goldman Sachs said higher oil prices could add pressure through systematic selling. The bank added that a sharp drop in stocks could initially prompt investors to sell gold to raise cash when they receive margin calls and reduce leverage.
Asian markets posted steep losses in the same session, amid concerns about tighter regulatory scrutiny and slower investment in AI infrastructure, following a sell-off in U.S. technology stocks. Japan’s Nikkei 225 fell 5.7% to 57,576.63 points at midday, after recovering some of its initial losses. In South Korea, the Kospi dropped more than 8% in early trading before trimming its losses. Reuters said the Korean index hit 4,911.28 points, its lowest level since February 6, before falling 3.9% to 5,174.84 points at 02:30 GMT. The Associated Press also reported that the Kospi was down 7.4% at 4,985.99 points at midday, a reading that reflects different measurement times during the session.
Despite the session’s pressure, Goldman Sachs said structural demand from central banks continues to support gold, and that private wealth investors and other long-term investors may view it as a hedge against fiscal sustainability risks. The bank’s estimates published in August projected that central banks would buy an average of 50 tonnes of gold a month in 2026, compared with an average of 17 tonnes a month before 2022. The bank estimated June purchases at 100 tonnes a month on a three-month seasonally adjusted basis, up from 66 tonnes the previous month. In local market data, spot gold’s daily close was $4,044.89 on November 5, while the gold contract closed at $4,113.5 the same day. These figures show trading levels in the previous session, while Reuters’ spot gold reading was from early trading on Friday.
Investors were awaiting the U.S. nonfarm payrolls report, due at 13:30 GMT on November 6, as well as a later appearance that day by Federal Reserve Vice Chair Michelle Bowman. The CME FedWatch tool showed traders putting the probability of a December rate hike at 68%. That pricing puts monetary policy expectations at the center of attention in the gold market, alongside oil prices’ impact on inflation concerns. In South Korean stock markets, an analyst at Mirae Asset said the focus would be on whether foreign investor selling eases and on the extent to which AI investments are delayed. The analyst added that investors would also watch to see whether exaggerated concerns dissipate.