HSBC sees gold rebound potential in 2027 if Fed eases rate hikes

Gold may experience a rebound in 2027 if the Federal Reserve’s rate hikes prove less aggressive than currently anticipated, according to HSBC. The bank has adjusted its near-term forecasts downward due to rising oil prices, a strong US dollar, and hawkish rate expectations, but it remains optimistic about gold’s longer-term prospects.

HSBC’s chief precious metals analyst, James Steel, noted that gold has had a volatile year. Prices peaked at a record $5,450 per ounce on January 30 before dropping to $3,942 by the end of June. The decline was driven by the Iran conflict, higher oil prices, rising yields, and a stronger dollar, which led to significant liquidation. A brief recovery in late summer faded after the Fed’s September rate hike and further tightening expectations.

Looking ahead, HSBC expects these factors to continue pressuring gold in the short term. However, the bank maintains a constructive long-term outlook, suggesting that if the Fed’s rate hikes fall short of market expectations, gold prices could rise again in 2027.

One key support for gold, according to HSBC, is steady demand from central banks. These institutions continue to purchase gold as part of their diversification strategies and to address geopolitical concerns. This demand is expected to help stabilize prices even if speculative interest wanes.