Gold prices fell below $1,650 an ounce on Friday, the lowest in over two years, remaining under pressure from a strong dollar and surging Treasury yields that reflected expectations for tighter monetary policy and slowing global growth. The US Federal Reserve led a raft of central bank rate hikes this week, delivering its third straight 75 basis point rate increase to bring down inflation. The European Central Bank is also expected to raise rates further, with ECB board member Isabel Schnabel saying Thursday that elevated inflationary pressures in the euro zone are likely to be more persistent than anticipated. Higher interest rates raise the opportunity cost of holding non-yielding bullion, denting its appeal. Gold also lost its shine as a store of value in times of economic uncertainties as the US’ relative economic strength and the Fed’s aggressive stance against inflation lifted the dollar at the expense of other safe-haven assets.
Historically, Gold reached an all time high of 2074.88 in August of 2020. Gold - data, forecasts, historical chart - was last updated on September of 2022.
Gold is expected to trade at 1656.47 USD/t oz. by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 1601.86 in 12 months time.