Gold Price Forecast: XAU/USD would benefit from the prospect of less aggressive Fed rate hikes – Commerzbank

Gold is trading at just shy of $1,660. If the market prices out future rate hikes to some extent, the yellow metal could thrive, strategists at Commerzbank report.

Eventful week for gold

“We envisage virtually no recovery potential for the gold price for as long as there is no end in sight to the aggressive rate hikes. Next week’s Fed meeting is therefore likely to have an important bearing on the gold price trend.” 

“Another pronounced rate hike of 75 bps is generally anticipated after US inflation remained stubbornly high again in September, core inflation climbing to a 40-year high of 6.6%. That said, if the central bankers were to hint that they will raise their key rate at a less aggressive pace in future – in response to the cooling economy, for instance – the gold price could be lent some tailwind.”