Gold Price Holds Steady Above $4,000 Amid Contrasting Predictions
The gold price has been experiencing a rollercoaster ride over the past few years. After reaching a record high of $5,595 in January, it dropped to around $4,161 due to energy-driven inflation from the Iran war. However, despite Treasury yields being high, the gold rate remains above $4,000 an ounce.
Bullion has been on a four-year trend, with its price moving largely in the opposite direction of real yields. The latest trend suggests that the post-2022 demand premium is more durable than expected, setting the stage for further gains once the US Federal Reserve's tightening cycle ends.
Bank of America predicted that gold will fall to $3,750/oz in the fourth quarter due to near-term headwinds from oil prices, inflation, and a hawkish Fed. HSBC toned down its gold price forecasts, citing expectations of further US interest rate hikes and higher oil prices. However, the bank still expects longer-term support for gold to remain intact.