Falling treasury yields, weaker dollar, heightened macro uncertainty and a volatile equity market form a backdrop conducive to a rising gold price, as strategists at ANZ Research note. XAU/USD is trading at 1640.35.
“Gold remains a risk diversifier and a good hedge against elevated geopolitical risk, in the near term.”
“Synchronous central bank rate cuts are the key to supporting gold investment demand. The upside risk for gold has increased to USD1,900/oz.”
“Even with gold having rallied 10% this year, our valuation model suggests it is still slightly undervalued.”