According to the Fed Fund Futures, market participants now expect the first 25 bps rate cut to be implemented by the Fed by May. 50 bps of rate cuts by mid-2024 are priced in. We believe that the market is getting ahead of itself here: our economists don’t expect to see the first Fed rate cut until the third quarter of 2024. We therefore envisage downside potential for the Gold price in the coming months if the rate cut expectations for the first half of 2024 – which we regard as premature – have to be scaled back. 

As we are confident that the Fed will lower its interest rates quite significantly in the second half of next year though, namely by a total of 100 bps, the Gold price should then be able to gain again and climb to a new all-time high of $2,100.