Crédit Agricole Gold Forecast Hits Speed Bump Amid Market Weakness

Crédit Agricole's bullish forecast for gold prices has taken a hit due to recent weakness in the market. Despite its September retreat, the bank still targets $5,000 by December 2026 and $5,500 in December 2027.

The current price of gold in US dollars (XAU/USD) closed near $4,136 an ounce on Friday, down 1.13% from the previous day's close. This represents a significant decline from the bank's target, with the first milestone requiring approximately 21% upside from the current level.

Crédit Agricole acknowledges that gold remains a safe-haven asset and currency debasement hedge, but notes that its recent underperformance has not secured a recovery. The bank attributes this to weak US jobs data, which showed just 29,000 additional jobs in September and annual wage growth slowing to 3.0%. This gives the Federal Reserve less reason to raise rates, potentially easing competition from interest-bearing assets.

However, despite these factors, the price of gold nevertheless finished the session lower. Higher real yields increase the opportunity cost of holding bullion, which pays no income, making it harder for gold prices to recover.