Gold price is set to remain under pressure due to the strongly appreciating US dollar. Therefore, strategists at Commerzbank downgrade their XAU/USD forecasts.

USD to remain strong for quite some time yet

“We expect the Fed Funds Rate to climb to 5% by the spring of 2023, i.e. by another 175 basis points from its current level. The US dollar is therefore likely to remain strong for quite some time yet. The headwind facing gold will thus persist for some considerable time.” 

“We are downwardly revising our gold price forecast for the end of this year to $1,700 per troy ounce (previously $1,800).” 

“The lower starting level, noticeably higher interest rate forecast and lower prediction for the EUR/USD exchange rate also translate into a lower path for the gold price next year. We expect gold to climb to $1,800 per troy ounce by the end of 2023 (previously $1,900).”