Economists at ANZ Bank believe XAU/USD could see another leg up as key factors are turning in favour of gold investments. Record low US real-yield, inflation, expensive equity valuation and weaker dollar are likely to encourage strategic allocation in the yellow metal.
- US real yield: “Record low yield again turning in favour of non-yielding gold investment.”
- US dollar: “Weakness should continue to be a key support for investor demand.”
- Central banks’ gold buying: “Inflation and weaker USD are supporting central bank gold purchases. Meanwhile, physical demand in India should recover ahead of the festive season.”
- Monetary policy: “Fading likelihood of monetary tightening looks supportive in the near-term.”
