Gold Price Forecast: XAU/USD may shine again, seen at $1,850 by end-2023 – Commerzbank

Gold price has had an eventful year, even though by the middle of December it is almost back at the level it was at the beginning of the year. Economists at Commerzbank expect the yellow metal to fall to $1,750 earlier next year before trending back higher towards $1,850 by end-2023.

Gold should be supported by the weakening of the USD

“We expect the Gold price to initially fall back towards $1,750 until it is clear that the Fed's cycle of interest rate hikes is over.” 

“According to Fed Fund Futures, the market still sees the interest rate peak at slightly below 5%. In the short term, there is thus a need for an upward adjustment of interest rate expectations, which should weigh on Gold.”

“After what is expected to be the last interest rate hike in March, a period of unchanged rates is likely to follow before the Fed cuts the key rate again toward the end of 2023 in view of a weak economy and lower inflation. The Fed, on the other hand, is not yet forecasting this. As soon as the Fed also adopts this view, Gold should rise again. This should be the case in the second half of next year.” 

“Gold should also be supported by the weakening of the US Dollar expected by our currency strategists.”

“We expect XAU/USD to rise in the second half of the year to $1,850 by the end of 2023.”