The first shift is the ‘Goldilocks’ scenario. The US economy remains resilient as evidenced by strong economic data. As a result, the market has pushed out the possibility of a hard landing. This diminishes safe haven flows for Gold.

The second economic shift is the higher-for-longer interest rate regime. Our baseline forecast is rates are at their peak, but we do not rule out the possibility of one more rate hike, depending on the data. Either way, real rates are likely to lift amid easing inflation. As a non-yielding asset Gold inversely tracks US real interest rates.

Overall, we see short-term headwinds to the Gold price. However, our medium-and long-term view on Gold remains positive. We shift our price target of $2,100 to the end of Q1 2024.