The main factor weighing on Gold is presumably the expectation of interest rates remaining higher for longer after the Fed made fairly hawkish remarks last week. This is also evident in the marked appreciation of the USD. However, we are still sceptical about whether the Fed will in fact hike its interest rates even further in the autumn on the one hand, and on the other whether the current view of many market participants, namely that the US economy will experience a ‘soft landing’, will prove accurate. 

We continue to see upside potential if anything for XAU/USD in the medium term. In the short term, however, Gold may well make a renewed bid for the $1,900 mark if inflation fears increase in response to the recent sharp rise in oil and gasoline prices again and if at the same time, the US economy continues to perform fairly robustly for now.