HSBC Gold Special
Comment of the Day

November 25 2022

Commentary by Eoin Treacy

HSBC Gold Special

Thanks to a subscriber for this report from HSBC which may be of interest. Here is a section:

We believe the likelihood that the USD has peaked and expected further strong official sector and coin & bar and jewellery demand present compelling arguments for higher gold prices in 2023 and beyond. That said, until the end of the Fed’s rate hike cycle is complete, and institutional demand for gold increases, prices may be constrained. This leads us to look for weakish prices in early 2023 with increases more likely as the year unfolds.

Eoin Treacy's view

Generally speaking gold requires a series of catalysts to spur a significant uptrend. The first is negative real interest rates. That’s when interest rates are deliberately held below inflation for a prolonged period to denude savers of the opportunity to profit from conservative investments. That policy also inflates asset prices and decreases the purchasing power of cash. However, negative real rates are not a sufficient catalyst for outsized performance by gold.

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