US Dollar strength and central bank tightening have weighed heavily on Gold in 2022. Next year, economists at ING expect Gold to rebound as Fed easing starts.

There is room for more downside with further tightening expected

“We expect Gold to remain on a downward trend during the Fed’s ongoing tightening cycle. But while in the short term we see more downside for XAU/USD amid monetary tightening, any hints from the Fed of an easing in its aggressive hiking cycle should start to provide support to prices. For this to happen, we would likely need to see signs of a significant decline in inflation.”

“We should see inflation coming off quite drastically over 2023 and this will then open the door for the Fed to start cutting rates over 2H23.” 

“Under the assumption that we see easing over 2H23, we expect Gold to move higher over the course of 2023 with XAU/USD reaching $1,850 in 4Q23.”