Gold Price Forecast: A pause in Fed’s rate hiking cycle is normally supportive for XAU/USD – ANZ

Synchronised rate hikes and a stronger US Dollar have weighed on Gold in 2022. But the tide is turning in favour of the yellow metal, in the opinion of economists at ANZ Bank.

Interest rate environment is likely to remain supportive into 2024

“The average performance of Gold in the past five rate hike cycles has been 12-15%, so we can expect that rate of return in 2023, which suggests a target price of $1,900 towards the end of the year.”

“The interest rate environment is likely to remain supportive into 2024, as the Fed starts cutting interest ratesonce inflation is managed within its target range.”

“We also expect a sustained decline in US 10y Real Yields, which is likely to stabilise in H2 2023.” 

“We believe investors will start positioning themselves in H2 2023 against growing recession risks. An economic ‘hard landing’ would be an upside risk for Gold prices, which could bring forward the rate cut in late 2023.”