Gold started the year with a bang. Economists at hold a constructive view for Gold over the next 12 months, but a short-term correction looks likely if a hawkish Fed surprises the market.

Several factors favour Gold in 2023

“We expect Gold to remain in favour as inflation retreats and interest rates near their peak. We see the following drivers supporting the precious metal: A potential pause in the Fed’s interest rate cycle in Q2, rising recession risks, potential downside in the USD, geopolitical risks remaining high and strong physical demand.”

“The recent rally nevertheless looks vulnerable to a price correction as it was largely driven by expectations that the Fed will turn dovish. Any disappointment on the monetary policy front could see prices correcting in the short term.”

“We keep our 12-month price target unchanged at $1,900.”