Gold has reached its highest level since June 2021. Economists at UBS stick to their forecast of $1,650 by year-end but in the upside scenario, XAU/USD is expected to rise as high as $1,950. We are keeping a target of $1,650/oz by end-2022. Upside scenario. Gold December 2022 target: $1,850-1,950/oz.
XAU/USD to tank towards $1,350 in the downside scenario
The Fed becomes dovish, introducing another round of quantitative easing measures, or it allows inflation to overshoot, which would once again support investment demand for gold. Downside scenario. Gold Dec 2022 target: $1,350-1,450/oz. Fed becomes even more hawkish, hiking rates aggressively in 2022 and pushing up US real rates strongly, which would likely trigger substantial outflows from gold ETFs.