Synopsis:
ANZ remains bullish on gold, lifting its 6-month forecast to USD 3,200/oz, supported by strategic ETF inflows, ongoing geopolitical tensions, and expectations of Fed rate cuts. Meanwhile, their stance on the USD is neutral in the near term, as falling US yields have weighed on the DXY, particularly against European currencies. However, tariff risks and soft EU data could reignite EUR downside, with EUR/USD expected to retreat toward 1.05 if European optimism fades.
Key Points – Gold:
1️⃣ Gold Breaks $3,000, ETF Inflows Drive Rally 📈
- ETF holdings up 110t, reaching highest level since Oct 2023.
- Speculators have been liquidating, suggesting the rally is not positioning-driven.
2️⃣ Supply Dislocation Persists, Adds Volatility ⚖️
- Comex inventories hit record 1,287t.
- Swiss gold exports to the US surged 55t m/m in February.
- CME delisted Gold Kilo Futures, possibly increasing volatility.
3️⃣ Outlook Upgraded to $3,200/oz (6M Target) 🌍
- Geopolitical risks: Iran sanctions, Middle East escalation, Russia rejecting ceasefire.
- Lower real yields and risk-off sentiment continue to support gold.
Key Points – USD:
1️⃣ USD Under Pressure, Especially vs. Europe 💵
- DXY weaker as falling US yields reflect growth headwinds.
- Losses mostly against EUR and CHF; AUD, NZD, and CAD more stable.
2️⃣ April 2 Trade Review a Key Risk for USD and EUR/USD ⚠️
- Potential tariffs on EU could trigger renewed EUR weakness.
- Delays/disappointments in German spending may further unwind recent EUR strength.
3️⃣ Neutral Near-Term USD View, Watching PMIs & Data Momentum 📊
- Fed projected only 50bps of cuts, helping support USD.
- But Powell’s cautious tone leaves door open for earlier easing, depending on data.
- Upcoming US PMIs could shift sentiment if they show a rebound in activity.
Conclusion:
ANZ maintains a bullish gold view amid strong ETF flows and rising geopolitical risks, upgrading its 6-month forecast to $3,200/oz. For the USD, near-term risks are balanced, with attention turning to US PMIs and the April 2 trade review. Tariff announcements and fading EUR optimism could push EUR/USD back toward 1.05, but USD performance will hinge on US growth momentum and EU stimulus execution.
