Gold Q4 Fundamental Forecast: Outlook Continues to Weaken

Gold Speaking Factors:

  • Under is a preview from the This fall Elementary Forecast for Gold.
  • To entry the complete forecast for Gold, click on on the hyperlink under.

Trying forward for 4Q’21, the forecast for rising actual US yields has solely improved, leaving gold costs in tough territory for the remainder of the 12 months. In an atmosphere outlined by buyers looking for out increased yielding and extra growth-sensitive belongings, gold costs could wrestle outdoors of remoted bouts of threat aversion round China’s Evergrande collapse or the US debt ceiling debate.

Whereas the mix of unfastened financial coverage and expansionary fiscal coverage ought to theoretically be bullish for gold costs, it seems that we’re nearing the tip of this period of pandemic stimulus insurance policies. The Federal Reserve has moved nearer to formally starting its winddown of asset purchases, and the scope and scale of extra authorities spending by the Biden administration seems extra restricted than beforehand anticipated – if something occurs in any respect.

Gold Futures versus US Treasury Nominal, Actual Yields and US Breakevens (September 2016 to September 2021) (Chart 1)

Gold Q4 Fundamental Forecast: Outlook Continues to Weaken

Sources: Bloomberg, Federal Reserve


— Written by Christopher Vecchio, CFA, Senior Strategist


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