Gold rush will lose steam, but still a good strategic bet

The strength of the recent gold price rally has defied even our already bullish expectations, but we think prices are vulnerable to consolidate at just above $2500/oz in the short term. As a result, we close out our tactical long position on gold that we re-opened in July 2024.

What you will learn:

• Gold prices hit another new all-time high of $2,685/oz last week, as markets got ahead of the Fed again. Pricing indicated another 50bps in rate cuts at the FOMC’s November meeting, against our baseline of a 25bps cut.
• Given how much more easing markets have already priced in, we think there is room for US yields to back up from here, which will push gold lower and in line with our forecast of $2,500/oz by year-end.
• Still, we remain bullish on a strategic horizon as we continue to see strong fundamentals ahead, with EM central bank buying that is far from moderating.