Gold Price Forecast: Potential for further XAU/USD corrections to be limited – Commerzbank

The Gold price fell to a two-month low of $1,985 this week following the publication of higher-than-expected US inflation data. Economists at Commerzbank analyze the yellow metal’s outlook.

Key interest rate cuts are still expected this year

Following the unexpectedly high US inflation data, there was a significant setback in the price of Gold, which slipped below $2,000 per troy ounce. However, as the market is already very cautious with regard to key interest rates, the potential for further correcti ons is likely to be rather small.

According to Fed Fund Futures, a first rate cut is now fully priced in only by June. At the end of the year, the Fed interest rate is expected to be around 4.50%. This is 50 basis points more than expected two weeks ago. After all, key interest rate cuts are still expected this year.