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Gold price has given back some of its gains of the past two weeks. However, economists at Commerzbank consider the further correction potential to be limited, which is why they have raised their forecast for XAU/USD.

XAU/USD unlikely to fall back toward $1,800 in the foreseeable future

“Markets seem to have calmed somewhat. As a result, the Gold price has given back some of its gains. However, we do not believe that it will fall back to its starting levels of around $1,800 in the foreseeable future.”

“We estimate that the corridor for the Fed Funds rate could be raised further by a total of 50 bps to 5.25-5.50% in the next months. However, the decisive factor is that the market is likely to realize that, contrary to its current expectations, the Fed will not lower its interest rates this year. Due to the need for a correction of market expectations, we expect the Gold price to fall to around $1,900 (previously $1,800) in the coming months.”

“However, rate cut speculations are likely to return and drive the Gold price upwards on a sustained basis as soon as US inflation has fallen more sharply and the significantly higher interest rates are felt more strongly in the real economy. This should be the case in the second half of the year, which is why we continue to expect XAU/USD to rise then. We have even raised our year-end forecast from $1,950 to $2,000.”

Source: https://www.fxstreet.com/news/gold-price-forecast-xau-usd-year-end-target-raised-to-2-000-commerzbank-202303301459