As interest rates in the US peak, volatility in the rates space is likely affecting the march higher in Fold. If and when rates markets calm down, this will likely create a drag on Gold prices.

US rates can come off more and sooner than rates in other OECD economies, signalling possible dollar weakness ahead, creating a tailwind for Gold.

With a recession in the US looming – however mild – there is a risk that the Fed will have to start lowering rates before sticky inflation budges, lowering carrying costs and elevating the expected return for Gold.

Risk premium is based on the low-probability, high-impact scenario of Iran becoming directly involved in the conflict. This risk, while not our base case, should continue to provide medium-term support to Gold prices.

We expect strong central bank Gold purchases and the broad de-dollarisation theme that will accompany that to remain a long-term supporting driver for Gold, but most of the impact should be felt beyond our forecasting horizon.

XAU/USD – 4Q23 $2,000 1Q24 $2,100 2Q24 $2,200 3Q24 $2,200 4Q24 $2,200