Gold Price Forecast: XAU/USD to remain supported even if geopolitical tension subsides – ANZ

FXStreet Insights Team FXStreet

Gold prices jumped 6% in the past week, primarily due to the Israel-Hamas war. Economists at ANZ Bank analyze the yellow metal’s outlook.

The Israel-Hamas war will heighten haven demand

While the Israel-Hamas war will drive haven flows towards Gold, our positive view for the price hinges on the Fed rate cycle nearing an end. This will result in a retreating US yield, reducing the opportunity cost of Gold.

Haven-induced upside in the USD would not have a negative impact on the Gold price. We hold our long-term bearish stance for the USD, which will support Gold going into 2024.

Central bank purchases are likely to be strong, and demand for physical Gold gets a seasonal boost in Q4.

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.

AUD/USD holds above 0.6950 as bullish USD caps gains

AUD/USD edges lower during the Asian session on Tuesday, stalling a two-day recovery move from a two-month low, touched last week. An extended rout in the fixed income market keeps US bond yields elevated near multi-year highs. This, along with geopolitical uncertainties, helps the US Dollar retain its bullish tone despite receding October Fed hike bets. However, expectations for another RBA rate hike this month could act as a tailwind for the Aussie.

USD/JPY rises back above 158.00 despite hawkish BoJ outlook

USD/JPY rises back above 158.00 in the early European morning on Tuesday. The pair strengthens as the Japanese Yen fails to find any inspiration from hawkish BoJ expectations and looming intervention risks. Meanwhile, geopolitical uncertainty and elevated US bond yields keep the US Dollar near its YTD high despite receding October Fed hike bets. This, in turn, helps the pair stay supported.

Gold trades with modest gains; still below $4,200

Gold builds on Monday’s marginal bounce, although it struggles to reclaim the key $4,200 mark per troy ounce on Tuesday. The yellow metal’s advance comes on the back of the fresh downside momentum in the US Dollar in tandem with retreating US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP bulls battle to restart uptrend amid ETF outflows

Bitcoin upholds a robust bullish outlook, trading at $85,837 on Tuesday as sellers push to regain control over the trend. Altcoins, meanwhile, reflect Bitcoin’s ranging action, with Ethereum trading sideways above $2,700 and Ripple hovering around the pivotal $1.50 level.

Japanese Yen nears 158.00: Two analysts agree it's bullish, and disagree on how far the breakout goes

The JPY is drifting near 158.00 against the USD ahead of a busy week of Japanese data and a still-unclear BoJ timetable. The two most recent FXStreet analyses agree on the direction, but they disagree on the target and the mechanism.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.