Pricing pressure remains intense. Combined with a slightly weaker USD and amid a stabilisation in the growth dynamic, strategists at ANZ Bank maintain gold short-term price target at $1,900.
Rates and USD remain key to one last rally for XAU/USD
“Our gold valuation model still suggests gold is undervalued. The rally in bonds and recent strength in the USD has seen investors demand for gold wane. However, the undervaluation of around $150 has been driven by expectations that the spike in inflation will be transitory.”
“If inflation expectations start to drift, the gold price could push higher. If the 30y breakeven rate were to rise 10-15 basis points from the current level of 2.25%, we would see gold’s valuation push up to nearly $2,000. This assumes slightly higher nominal bond yields than we are experiencing, as well as a relatively stable US dollar.”
“We still expect the gold price to inch higher. As such, we maintain our short-term price target of $1,900.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.