The bank’s metals research team, led by Michael Widmer, now views the $6,000 target as unattainable in the current environment. The primary obstacle remains the Federal Reserve’s shifting strategy; markets are now pricing in a greater than 70% probability of rate hikes by September, according to the CME FedWatch Tool. This transition from expected rate cuts to sustained tightening has effectively halved the potential upside for gold prices.

Widmer notes that structural economic issues—specifically a fiscal deficit hovering around 6% of GDP and a declining foreign appetite for U.S. Treasuries—continue to provide a floor for gold. Even as inflation proves persistent due to supply chain fragmentation and shifting trade policies, the bank suggests that investors may eventually rotate capital toward gold as they transition away from traditional 60:40 portfolio models. For now, the metal remains tethered to the Fed’s hawkish path, waiting for a catalyst to reignite investment demand.