The probability of the Fed pausing in the upcoming meeting has risen, but strong economic activity is suggesting the Fed will remain hawkish in the short term. This could see the Gold price consolidating.

Nevertheless, the Fed would eventually end its hiking cycle in H2 2023, which is a structural support in the medium and long term. The prospect of the USD resuming its downtrend will be another tailwind.

We believe the recent decline in the Gold price will encourage fresh buying, which is likely to be supported by lean speculative positioning. We keep our year-end Gold price target unchanged near $2,100.