Gold prices fell close to 1% on Tuesday and are trading in the $4,100+ zone. The XAU/USD index has been range-bound between $3,900 and $4,000+, showing no support to climb above the $4,200 mark. The precious metal is unlikely to attract bullish sentiment, as activity in the US services sector remains tight. The unprecedented rally of the past three years has cooled down and is now moving in tandem with the markets. However, leading global bank HSBC wrote in a note to clients that gold prices could shoot up by the end of the year.
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HSBC Says Gold Prices Will Rally By the End of 2026
HSBC Global Chief Investment Officer Willem Sels and Global Head of Wealth Insights Lucia Ku wrote in a note to clients that central banks buying gold could elevate prices by the end of the year. “We believe gold may remain range-bound in the near term amid elevated real yields and a stronger USD. However, demand for portfolio diversification, central bank buying and steady ETF inflows should support gold prices over the medium term.”
HSBC’s analysts wrote that gold will act as a diversifier amid the unfinalized US-Iran peace deal. “Gold did not rally during the Middle East conflict and has largely moved in tandem with equities.” However, demand for portfolio diversification, central bank purchases, and steady ETF inflows continue to support our bullish view on gold and its role as a diversifier against broader portfolio risks,” they said.
“We anticipate further upside for gold by year-end,” wrote the HSBC analysts. The leading global bank is confident that the precious metal could reverse course and head north. The glittery metal has been an attractive investment for central banks, which have been accumulating it since 2022. The majority of central bankers are still loading up on gold and are diversifying their reserves.