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Gold prices fell in March, despite the US entering a deepening conflict in West Asia that should, in theory, support advance fiscal dominance and lead to demand for safe assets. Supply was largely driven by US and European Exchange Traded Funds (ETFs), as well as central banks, despite underlying demand from Asian ETFs and physical buyers continuing. We see this as tempering the pace of price increases for some time, making the path higher to our USD 6000/troy ounce target less smooth than the path so far – but we continue to expect these levels to be reached by early 2027, with fiscal dominance as the driver.
Gold sees heavy selling despite Iran-driven geopolitical risk
Gold prices saw heavy supply in the first half of the month, despite risk aversion, with multiple competing narratives – but evidence was of supply from the US. Supply was seen with hawkish central banks as well, though the last few days of the month saw prices rise – first with hopes of a US off-ramp in Iran leading reversal of some flows, and then with demand from Asian names.
Underlying demand overpowered by Western ETF, central bank supply
Gold prices saw heavy supply in the first half of the month, despite risk aversion, with multiple competing narratives – but evidence was of supply from US and European ETF markets amid moves higher in global yields. Supply was seen with hawkish central banks as well, though the last few days of the month saw prices rise – first with hopes of a US off-ramp in Iran leading reversal of some flows, and then with demand from Asian names.
Continue to expect prices to reach USD 6000/troy ounce by early 2027
We continue to align our views on gold, global rates and the USD, seeing moves towards fiscal dominance leading to a slight weakening in the broad USD and support to gold prices. With this, we continue to see prices rise towards USD 6000/troy ounce with Asian demand buying the dip as per past history though the path to this might not be as smooth as increases so far.
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