Many investors seek Gold as a portfolio diversifier in times of geopolitical tension. Gold may also gain from shifting market expectations that the Fed hiking cycle has already come to an end and that US rates could potentially come down faster next year if the implications of the war cause a faster-than-anticipated slowing in US economic activity.

Investors should note that uncertainty over both the war and the outlook for US rates may lead to choppy prices for Gold in the near term. But equally, we believe those who have long Gold positions should hold these in anticipation of a recovery over the next 6-12 months. Our forecast is for Gold to reach $1,950 by end-June 2024.