Gold Price Forecast: XAU/USD still has a way up – SocGen

Société Générale strategists analyze the five main factors that influence Gold prices

Rate volatility

With interest rates at record highs in the US, volatility in the rates market is likely to weigh on gold’s rise. When rates markets calm down, this is likely to be a drag on Gold prices.

Peak rate

US rates may fall further and sooner than rates in other OECD economies, signaling possible dollar weakness ahead, creating a tailwind for gold.

Recession in the US

Given the imminence of a recession in the US, however slight, there is a risk that the Fed will have to start lowering rates before inflation subsides, which would reduce maintenance costs and increase expected profitability of gold.

Geopolitics

The risk premium is based on the low probability and high impact scenario of Iran becoming directly involved in the conflict. This risk, although not our base hypothesis, should continue to provide medium-term support to Gold prices.

Central banks

We expect that the strong purchases of Gold by Central Banks and the extensive de-dollarization process that will accompany them will continue to be a long-term support factor for Gold, although most of the impact will be felt beyond our horizon. forecast.

XAU/USD – Q4 2023 in $2,000, first quarter of 2024 in $2,100, second quarter of 2024 in $2,200, third quarter of 2024 in $2,200, fourth quarter of 2024 in $2,200.