Gold tends to deliver a positive return whenever there is short term stress in the financial system. Nonetheless, economists at Standard Chartered expect the yellow metal to turn back lower toward $1,875 over the coming months.

High probability of XAU/USD overshooting in the very short term

“Investor positioning remains far from extremes, suggesting it is unlikely to stand in the way of further gains. These suggest there is a reasonably high probability of XAU/USD overshooting in the very short term, especially if banking sector fears persist. Having said that, we are mindful that Gold helps mitigate volatility over relatively short time horizons.”

“Over a longer three-month period, we would not chase recent gains excessively and instead expect Gold to settle back at around $1,875.”