Gold (XAU/USD) price forecast was revised significantly upwards, by $200 to $2,500 per troy ounce, by the end of the year, Commerzbank’s Commodity Analyst Carsten Fritsch notes.

Inflows are still comparatively subdued

“The price is already at this level, so we do not expect Gold to make any further gains for the time being. This is because the main driving force behind the price increase of more than 20% since the end of February has been the expectation of interest rate cuts by the US Federal Reserve. As can be seen from interest rate cuts of around 100 basis points already priced in by the market until the end of the year, not much additional impetus is to be expected here.”

“In addition, the high price level is likely to leave its mark on physical demand, as was already evident in the second quarter. It also remains to be seen whether the central banks will maintain their high level of Gold purchases. There was a trend reversal towards net purchases of Gold ETFs in the summer.”