HSBC has cut its 2569 gold price target to $4,560 following a stronger dollar and signals of tighter Federal Reserve controls.

HSBC has cut its average gold price forecast for 2569 to $4,560 per ounce and for 2570 to $4,925 per ounce, following a stronger dollar and signals of tighter Federal Reserve policy.

July 9, 2569 at 15.51:XNUMX a.m., Reuters reported that HSBC has lowered its forecast for the average gold price in 2569 and 2570. This is based on the reasoning that the market has shifted its view towards a more hawkish stance on US monetary policy, coupled with the strengthening of the US dollar, which is continuously putting pressure on gold prices.

HSBC has lowered its forecast for the average gold price in 2569 to $4,560 per ounce from $4,864 per ounce, while its forecast for 2570 has been reduced to $4,925 per ounce from $5,000 per ounce.

The bank also forecasts gold prices to fluctuate within the range of $3,800-$4,700 per ounce for the remainder of 2569, with a tendency to close the year at $4,750 per ounce. By the end of 2570, prices are expected to reach $5,025 per ounce.

As of 7:30 AM Greenwich Mean Time (GMT), spot gold prices were trading around $4,100 per ounce, down more than 20% from their all-time high of $5,594.82 per ounce reached on January 29th. This comes amid heightened tensions in the Middle East, fueling inflation concerns and expectations of a more tighter monetary policy from the U.S. Federal Reserve (Fed).

HSBC stated that a key factor contributing to the weakening of gold prices was the changing market outlook on U.S. monetary policy, which led to a stronger dollar and prompted investors to gradually sell off their gold holdings.

Furthermore, HSBC noted that gold purchases by central banks worldwide, a key driver of gold prices in recent years, have begun to slow down, although long-term diversification of international reserves is likely to continue supporting gold prices.

Meanwhile, the significant outflow of capital from Exchange Traded Funds (ETFs) investing in gold, which occurred heavily in the first half of the year, may begin to slow down or even reverse into inflows in the second half of the year.

Despite lowering its gold price forecast, HSBC believes the likelihood of further sharp declines in gold prices is limited, as the market has already largely reflected the negative impacts of a strong dollar and high interest rates.

Furthermore, the fundamental factors that supported gold prices prior to the conflict in the Middle East, such as concerns about government budget deficits, economic uncertainty, and public debt burdens of many countries, still exist and may help support gold prices in the long term.

HSBC concludes that while the conflict involving Iran may put downward pressure on gold prices in the short term, it believes this impact is unlikely to be prolonged.

refer : reuters.com

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