Synopsis:

ANZ has upgraded its year-end gold price target to USD 3,600/oz, citing a convergence of macro and geopolitical drivers. These include tariff-driven supply disruptions, mounting stagflation risks, and central bank demand, positioning gold as the ultimate hedge in the current climate.

Key Points:

• Perfect Storm for Gold:
  The outlook is supported by tariff uncertainty, anticipated growth slowdown, and inflation fears, all while interest rate expectations are shifting downward.

• Supply Dynamics:
  Despite gold being exempt from Trump’s tariffs, elevated Comex inventories and disrupted global flows signal continued arbitrage-related dislocations.

• Historical Parallels:
  The current rally resembles the 1970s-80s surge, with real-equivalent highs suggesting potential upside toward USD 3,483/oz and beyond.

• Underowned Relative to Risk:
  The gold-to-S&P 500 ratio remains low, and ETF holdings are still 20% below 2020 highs, suggesting room for more risk-averse capital inflows.

• Sovereign Demand:
  Central bank purchases are projected at 900–1,000 tonnes, reflecting a global diversification away from USD-denominated assets amid trade tensions.

• Risks to the Forecast:
  A resolution to the US-China trade dispute, broader trade détente, or upside surprises in the US economy could limit further price gains.

Conclusion:

ANZ maintains a strong bullish bias for gold and sees a strategic allocation case strengthening amid a deteriorating macro backdrop. While the risks are asymmetric, their revised target of USD 3,600/oz by year-end reflects conviction in gold’s positioning as a multi-dimensional hedge.