Gold Price Forecast: XAU/USD will only recover lastingly once an end to rate hikes is in sight – Commerzbank
22.11.2022, 15:34

Gold Price Forecast: XAU/USD will only recover lastingly once an end to rate hikes is in sight – Commerzbank

Gold price dropped to a 10-day low near $1,730 on Monday. Economists at Commerzbank do not expect the yellow metal to stage a lasting recovery until the first quarter of next year.

Gold under pressure again due to firmer USD

“Gold price has dropped sharply again since the US Dollar ended its phase of weakness. Though the latest cooling of US inflation has dampened fears of rampant inflation and thus ever more pronounced rate hikes by the US Federal Reserve, it is still clear that the central bank has not yet finished tightening its monetary policy. After all, at 7.7% inflation is still a long way off its 2% target. 

“The latest surge in the Gold price was largely attributable to short covering. This price-driving factor has now evaporated, as the most recent CFTC data for the last reporting week revealed a shift to speculative net long positions.”

“We are sticking with our assessment that the Gold price will only recover lastingly once an end to the rate hikes is in sight. This is likely to be the case in the first quarter of 2023.”

 

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