Natixis Sees Gold Prices Plunging to $4,100 Amidst Rising Oil Costs

Natixis, a French bank, has released its latest gold report, outlining three possible scenarios for the precious metal's price by year-end. According to Bernard Dahdah, Precious Metals Analyst at Natixis, rising oil prices and persistent inflation are putting pressure on gold prices.

The bank expects gold prices to fall toward $4,100 an ounce by year-end in its base-case scenario, as the Federal Reserve considers another interest rate hike in December. Dahdah noted that gold has developed a negative correlation with oil prices, which is contributing to the downward pressure on gold prices.

Natixis' bear case scenario sees gold potentially falling as low as $3,500 an ounce due to higher oil prices, persistent inflation, restrictive monetary policy, and official-sector selling. However, if conditions in the Strait of Hormuz normalize and oil prices collapse, accelerating disinflation, Natixis expects gold prices to settle above $5,250 an ounce.