Gold Price Forecast: XAU/USD has been showing relative strength of late – Commerzbank

Gold price recovers after slumping to two-month low. Econmists at Commerzbank discuss XAU/USD outlook.

US Dollar is priced at its highest level since mid-March

“The market apparently still sees a small risk that the compromise found at the weekend to raise the debt ceiling in the US will not pass Congress. Voting is set to take place in the House of Representatives today; afterwards the Senate will need to give its approval.”

“The Fed Fund Futures are still pricing in another 25 bps Fed rate increase at the next meeting in June with a probability of roughly 60%. A rate hike on this scale is still fully priced in at one of the next two meetings. In the market’s view, this is likely to be reversed again by year’s end. Against this backdrop, the Gold price has been showing relative strength of late, especially as the US Dollar is priced at its highest level since mid-March.”