Gold Price Forecast: XAU/USD to advance nicely in the second half of the year as Fed pauses – ANZ
17.03.2023, 15:55

Gold Price Forecast: XAU/USD to advance nicely in the second half of the year as Fed pauses – ANZ

Repricing of the Fed’s terminal rate will drive the Gold price in the short-term. Economists at ANZ Bank expect the Fed to pause its interest rate hiking cycle this year. This should lower the USD and leave US real yields intact, then lifting XAU/USD in the second half of 2023.

A weakening greenback will be a key tailwind for Gold prices

“Improving fundamentals across other major economies could limit the greenback’s upside. Our DXY forecast trajectory remains unchanged, and has the index falling to 98 by end of the year. This will be a tailwind for the Gold market.”

“We believe recalibration of market expectations around the FFR could keep gold prices volatile in the short-term. Nevertheless, we still expect the Fed to pause and for yields to trend lower towards year-end, which should support Gold prices in H2 2023.”

“We see last year’s monetary tightening starting to show up in slowing economic growth later this year. This could have a dual impact: slowing economic growth could trigger monetary policy easing, and Gold could attract haven flows.”

 

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