Broadly speaking, little has changed in terms of the key drivers for gold. As in the previous few quarters, gold remain mostly driven by USD and US interest rates movements. Specifically, gold maintains its inverse relationship with USD and interest rates. As such, whenever USD strengthens and / or when US interest rates rise, gold tends to weaken anew.

Despite the near term set back, we maintain our positive outlook for gold. We continue to see US interest rates topping out in the months ahead as the Fed reaches the tail end of its rate hiking cycle. Our view remains for USD to top out as well (albeit with a bit of delay towards the end of this year). And gold remains an important diversifier of portfolio risk. In fact, Emerging Market and Asian central banks continue to load up on gold reserves, specifically China.

Overall, we maintain our positive view for gold and forecast that gold will trade above USD 2,000 /oz in 2H23 and thereafter, rising further to USD 2,100 / oz in 1H24.