Gold price levelled-off from its recent high due to a stronger US Dollar and rising yields. Strong labour data and sticky inflation mean further rate tightening cannot be ruled out, economists at ANZ Bank report.

Further tightening looks possible

“Renewed strength in the US dollar saw the Gold price give up recent gains. Historically low unemployment and high inflation suggest further rate tightening cannot be ruled out. This is despite yield curve inversion signalling an impending recession, which could eventually lead to either a pause in rate increases or even cuts.”

“Investor allocations to Gold slowed in April but remained positive. Central banks added more Gold to their reserves, and physical demand looks strong despite record prices.”