FXStreet reports that economists at HSBC discuss gold prospects.

“The base inflation effects have started to lift US YoY CPI over the next couple of months, which could see US headline CPI inflation approaching nearly 4% in May. Nevertheless, we also expect inflation pressures in the US to moderate in the second half of the year. If the US inflation outlook unfolds in the manner expected, then US Treasury yields and possibly the USD could ease later in the year, allowing for gold gains.”

“Monetary and fiscal policies continue to provide underlying support for gold. As such, any further gold weakness over the near term should be modest. As we continue to expect a modest USD decline this year, it is also potentially supportive of gold, as is any uptick in trade tensions or geopolitical risks. Possible financial market instability due to asset price appreciation could also spark renewed quality asset demand for gold.”