Gold price surged by $30 immediately after the Fed’s meeting on Wednesday evening and reached $1,960 the following day. Economists at Commerzbank see upside risks to their XAU/USD year-end forecast of $1,850.

US interest rate outlook to remain the more important driver

“The US interest rate outlook is likely to remain the more important driver in the medium term.” 

“There is still a substantial discrepancy between the market’s expectation and the Fed’s view of the inflation trajectory and the corresponding interest rate trajectory. Since Wednesday, however, the probability has increased that the Fed is shifting more toward the market’s view. This results in an upside risk to our Gold price forecast of $1,850 at year’s end.”