Gold Price Forecast: XAU/USD’s further upside potential likely to remain limited – Commerzbank

Gold has almost recovered its losses which it had suffered following the strong US inflation data. Analysts at Commerzbank analyze the yellow metal’s outlook.

Gold investments would continue to be at a significant disadvantage relative to interest-bearing US assets

It appears that interest rate cuts are still likely this year, albeit at a slightly later date. This has been confirmed by statements from FOMC members. They had recently only questioned the market's early timing of a turnaround in interest rates, but not rate cuts per se. 

Nevertheless, Gold's further upside potential is likely to remain limited. This is because a persistently robust US economy, coupled with stubbornly high inflation, argues against a pronounced cycle of rate cuts, meaning that Gold investments would continue to be at a significant disadvantage relative to interest-bearing US assets.