Gold Price Forecast: XAU/USD seen at $2,000 by year-end as its safe-haven appeal is erratic – ABN Amro

FXStreet Insights Team FXStreet

Gold prices have rallied by 10% since the end of January. The rally reflects inflation fears, the war and concerns about currency debasement. Strategists at ABN Amro expect volatile gold prices their new XAU/USD forecasts for end-2022 and 2023 are $2,000 per ounce.

Inflation fears could continue to support gold, but market panic could send prices lower

“Higher inflation expectations and lower real yields are positive for gold. So, investors will continue to buy gold as an inflation hedge. But as the Fed will continue to hike and we also expect a higher dollar, gold’s fortunes will mainly be positive versus other currencies than the dollar.”

“Severe risk off and even market panic is usually not a positive environment for gold prices. When there is market panic, investors liquidate most positions and buy the most liquid assets such as US Treasuries, the US dollar and the Japanese yen.”

“We think that a shortage in the gold market is very unlikely, so runaway prices like seen in other commodities is unlikely in the gold market.”

“We expect price volatility in the gold market and our new gold price forecasts for the end of 2022 and the end of 2023 stands at $2,000 per ounce.”

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 clings to gains near 1.3400

GBP/USD retreats after reaching a three-week high above 1.3430, challenging the 1.3400 yardstick on Thursday. Although easing political uncertainty in the UK helps the quid limit its downside, escalating tensions in the Middle East support the Greenback, keeping Cable under scrutiny.

EUR/USD faces resistance around 1.1450

EUR/USD keeps the bid bias although it seems to have met a tough hurdle around 1.1450 on Thursday. The pair’s advance follows the bearish tone in the US Dollar despite escalating tensions in the Middle East and a broad-based cautious stance from market participants.

Gold flirts with two-day highs, approaches $4,130

Gold stages a modest rebound on Thursday, setting aside a three-day losing streak and managing to surpass the $4,100 mark per troy ounce. However, steady geopolitical tensions have revived concerns over persistently high global inflation, reinforcing expectations of higher rates across the board and somewhat curtailing the yellow metal’s upside potential.

Bitcoin stalls as mixed ETF flows, renewed US-Iran tensions cap upside

Bitcoin trades at $63,000 on Thursday, recovering slightly after facing rejection near $64,000. Renewed geopolitical uncertainty has dampened risk appetite, limiting BTC upside potential.

Japan may be changing its Yen strategy, but markets don’t look scared

Japan may be changing its intervention playbook, but that might not be enough to rescue the battered Yen. With USD/JPY hovering at four-decade highs, the currency’s weakness is being driven less by speculative pressure and more by a powerful structural force: the wide US-Japan rate gap.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance.