Gold Price Analysis: Softer demand from central banks and jewellery to cap any upside – HSBC

Gold underperformed year-to-date as economic recovery and risk-on sentiment continue. Strategists at HSBC downgrade gold to neutral because they think it’ll be difficult for the valuable metal to rally strongly from current prices amid now higher bond yields.

See – Gold Price Analysis: XAU/USD to suffer some near-term weakness – Commerzbank

XAU/USD has been weak as inflation expectations have pushed higher
“Inflation expectations remain elevated but appear to possess peaked. we expect inflation concerns are going to be temporary and mild with central banks still committed to keeping loose monetary policy.”

“The US 10 Year Treasury yield appears to possess stabilised around 1.6% after hitting recent highs of 1.75% at end-March signaling that inflation concerns could also be abating for the nonce .”

“Short-term, we’ve downgraded gold to neutral as we don’t expect significant capital appreciation over subsequent 3-6 months, especially with bond yields still elevated.”

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