The performance of Gold has been surprisingly strong despite a more restrictive monetary policy environment in 2022. The price of Gold has stayed above $2,000 for a significant portion of the last year, prompting economists at TD Securities to analyze the outlook for the precious metal.
According to TD Securities, XAU/USD is projected to average $2,200 in the next quarter due to the Fed’s dovish pivot and another year of record official sector buying, which are expected to fuel a bull run for Gold. The combination of anticipated Fed rate cuts in the coming months is expected to encourage traders to increase their long exposure. Additionally, strong physical demand and continued official sector buying are forecasted to lift prices to an average of $2,200 in the next quarter.
Looking ahead, TD Securities expects Gold to average $2,081 for the entire year of 2024.
Insight: Despite a restrictive monetary policy, Gold’s performance is being driven by a combination of factors including the Fed’s dovish pivot, record official sector buying, and strong physical demand. It is also interesting to note that the anticipated rate cuts by the Fed are expected to increase trader exposure to Gold, further supporting its price. This forecast provides valuable insights into the potential factors that may continue to impact the price of Gold in the coming months.
