Gold prices have stabilised after recent volatility, with XAU/USD trading at $4,796 (+1.83%) on Thursday, while the price of silver in US Dollars has also rebounded to $76.19 (+3.39%).
ANZ notes that precious metals have recently come under pressure, with a stronger US Dollar and a rise in US yields to around 4.4% reducing gold’s investment appeal. The bank highlights that gold prices have fallen around 15% during this period, despite only a modest decline in equities and a sharp increase in oil prices.
Nevertheless, ANZ maintains that underlying fundamentals remain supportive for gold.
The bank expects the Federal Reserve to take a cautious approach in response to geopolitical developments, looking through the initial inflationary impact of higher energy prices and wage pressures to assess whether longer-term effects become entrenched. Although short-term inflation expectations have risen to 3.8%, broader expectations remain relatively well anchored.
ANZ continues to forecast further monetary easing, with three additional Federal Reserve rate cuts expected in this cycle, including two in 2026 and one in 2027. While rising energy prices could delay the timing of these moves, the bank does not expect the easing trajectory to be reversed.
According to ANZ, a combination of global growth risks, geopolitical tensions, currency volatility and downside risks to equity markets will continue to support gold’s role as a portfolio diversifier. The bank also expects renewed investment and retail demand to emerge if prices fall below USD 4,500 per ounce.
Central bank demand remains an important pillar, with purchases moderating to 813 tonnes in 2025, although ANZ notes that deteriorating international relations continue to support reserve diversification into gold.
On silver, ANZ is more cautious, noting that while it will track gold’s direction, it is unlikely to outperform due to its greater exposure to industrial demand.
