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Gold Price Forecast: Persistently hawkish Fed will keep XAU/USD in check — ANZ

Softer-than-expected US inflation led to a sell-off in the dollar, contributing to the recovery in gold prices. In the opinion of ANZ Ban economistsk, this is unlikely to last.

Fed rate hike looms over gold

“The recent recovery in the price of gold was triggered by softer-than-expected US inflation in October. However, we believe the market reaction to the latest inflation figure was overstated, as inflation remains close to 7.7%. , well above the central bank’s target of 2%. Furthermore, the month-on-month increase remains at 0.4% in both September and October.”

“It is not enough for the Fed to be confident that inflation is on track to return to 2% sustainably. Any bullish comment from the Fed could reverse the recent bullish move in XAU/USD.”

“Reversing Inflation and rising rates through early 2023 would keep real rates higher, leaving a challenging backdrop for non-performing Gold.”

Source: Fx Street

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