Gold Price Forecast: XAU/USD to test record $3,100 should the Fed remain materially behind the curve – TDS

Gold jumped from a low of $1,782 at the start of 2022 to a high of $2,070 as Russian-to-Western world tensions peaked in the second week of March, before it fell back towards $1,925 as geopolitical tensions related to the war in Ukraine moderated somewhat. Strategists at TD Securities expect XAU/USD to average $1,863 this year.

Gold to drift below low-$1,800s by year-end if Fed policy gets much more aggressive 

“Based on the pattern of market behaviour over the last several years, we see considerable volatility and expect the yellow metal to average about $1,863 this year.”

“Average prices are likely to be highest in the latter part of H1-2022 as inflation stays at multi-decade highs, economic growth wanes and the Fed is seen as being behind the curve.”

“The outlook deteriorates in the latter part of the year as central bank policy gets much more aggressive in their fight against inflation, which should see price the yellow metal drift to modestly below low-$1,800s by year-end.”

“If the Fed does not become restrictive, the yellow metal can test the record $3,100 (in current dollars) found back in January 1980.”