Forex News

ANZ Bank Economists Expect XAU/USD to Give Up Gains with Easing of Banking Crisis

Published by
Nonhlanhla P Dube
  • Gold prices have rallied due to concerns over a global economic slowdown.
  • ANZ bank economists expect the yellow metal to give up its gains if the banking crisis eases.
  • The economists hold a bullish view on gold for the long-term, citing the pause in interest rate hikes by the Fed and the continued weakening of the USD as factors supporting their outlook.

Gold prices have rallied on the back of concerns over a potential global economic slowdown. The yellow metal is often seen as a safe-haven asset during times of market volatility and uncertainty. However, economists at ANZ bank have stated that they expect gold to give up some of its recent gains if the banking crisis eases.

ANZ bank stated that “while the ongoing banking sector issues remain an upside risk, we see gold prices giving up gains if the crisis eases.” This statement implies that the continued uncertainty in the banking sector is currently supporting gold prices, and if these issues are resolved, it could lead to a reduction in the demand for gold as a safe-haven asset.

Despite the expectation that gold may give up some of its recent gains, ANZ bank still holds a bullish view on gold for the long-term. They believe that as the Federal Reserve pauses its interest rate hikes and the US dollar continues to grind lower through the rest of the year, gold prices will continue to increase.

The Federal Reserve’s decision to pause its interest rate hikes is expected to support gold prices as it reduces the opportunity cost of holding gold. When interest rates rise, investors are often more attracted to assets that generate interest, such as bonds, rather than non-interest-bearing assets like gold. However, with the Fed not expected to raise interest rates in the near future, gold is likely to remain an attractive option for investors looking to hedge against inflation or market volatility.

The US dollar’s continued weakness is also expected to support gold prices. A weaker dollar makes gold cheaper for foreign buyers, increasing demand for the yellow metal and driving prices higher.

In summary, while ANZ bank expects gold to give up some of its recent gains if the banking crisis eases, they still hold a bullish view on the yellow metal for the long-term. The bank expects the Federal Reserve’s pause on interest rate hikes and the continued weakness of the US dollar to support gold prices through the rest of the year.

Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at nonhlanhla@rateweb.co.za

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Published by
Nonhlanhla P Dube

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