Gold Price Forecast: Time for XAU/USD to shine – DBS Bank

FXStreet Insights Team FXStreet

At current prices, gold is attractive to long-term buyers looking to hedge their portfolio against risks from dollar weakness, negative interest rates, high inflation and exogenous risk events. Economists at DBS Bank see the following four scenarios as probable, and the overall pattern is for gold price to rise in most scenarios.

See – Gold Price Forecast: XAU/USD to edge higher towards $1900 – ANZ

Gold to perform in most macro scenarios

“One scenario would be when the market renews its focus on US inflation risks, amid an improving labour market and supply-side disruption. This could set the stage for a ‘risk-off’ event. This scenario played out in 2003 when gold reacted strongly to inflation fears on the back of strong oil price.”

“Another scenario could be escalating virus cases as vaccine efficacy fades. This could lead to a downgrade in growth for 2022 and a delay in the quantitative easing (QE) taper timeline, which will then be a positive for gold. The US stock climb would probably come to a halt, and gold will serve its role as a hedge for volatility.”

“The inverse correlation with the USD Index (DXY) has intensified in 3Q21. Nevertheless, with negative correlation at a high, a reversal in the dollar’s strength could see a strong reversal rally in gold. Our DEER FX model indicates that the dollar is overvalued on a long-term basis. However, the dollar could stay firm into 1Q22, depending on the US’s QE taper timeline.”

“In a goldilocks scenario with moderate growth and mild inflation, there will be no rush for the Fed to hike interest rates, and bond yields will likely stay at low levels. We believe gold will still be supported in this environment as central banks around the world continue to accumulate gold as a risk diversifier.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD appears well offered near 1.3160

GBP/USD builds on Tuesday’s losses, although it now manages to pick up some pace and bounce off earlier multi-month troughs near 1.3140. The Greenback’s solid performance and continued political turmoil in the UK are keeping Cable under persistent pressure, with little sign of a meaningful recovery.

EUR/USD softens to near 1.1350 as Fed hike bets rise ahead of PCE inflation data

The EUR/USD pair declines to around 1.1355 during the early Asian trading hours on Thursday. The Euro weakens to its lowest level since June 2025 against the US Dollar as traders increase their bets on US interest rate hikes later this year. The US May Personal Consumption Expenditures inflation data will be the highlight on Thursday.

Gold off YTD lows, still struggles around $4,000 on hawkish Fed bets

Gold is off year-to-date lows, still struggling around $4,000 in the Asian session on Thursday as bears pause following the overnight slump to the lowest level since November 2025. Despite easing inflationary concerns amid falling oil prices, elevated Fed rate-hike bets help the US Dollar preserve its recent strong gains to the highest level since May 2025, weighing on non-yielding bullion.

Crypto market sheds over 50% of its value amid Bitcoin's brief decline below $60K

The crypto market has erased more than half of its value since reaching an all-time high in late 2025. The decline underscores the severity of the recent bear market and lack of a fresh catalyst to revive investor interest, according to a Wednesday X post by The Kobeissi Letter. The total crypto market cap peaked at a record $4.3 trillion on October 6, 2025.

5.90% to 5.45%: Why the Pound ignored the bond market’s relief rally

Keir Starmer resigned on Monday, and the Pound barely moved. That near-silence is the tell. Sterling's real driver these past four months has not been the prime minister, nor the left-leaning frontrunner lining up to replace him, but the long end of the gilt curve, which answers to a force no British politician controls.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.