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Gold Poised for 2027 Rebound if Fed Eases Rate Hikes, HSBC Predicts
M
Moneycontrol•05-10-2026, 12:41
Gold Poised for 2027 Rebound if Fed Eases Rate Hikes, HSBC Predicts
- •HSBC forecasts a potential gold recovery in 2027, contingent on the Federal Reserve adopting a less aggressive interest rate path than current market expectations.
- •Despite recent pressure from higher oil prices, a strong dollar, and hawkish rate expectations leading to near-term forecast cuts, HSBC maintains a long-term constructive outlook for gold.
- •Central bank purchases, driven by diversification and geopolitical concerns, are expected to continue providing a floor for gold prices.
- •Institutional demand, particularly from India and China due to regulatory changes and soft property/equity markets, is holding up well, with ETF selling beginning to reverse.
- •While physical demand remains weak due to high prices and inflation, modest mine output increases and expected recycling pickup in 2027 could balance the market.
Key Questions Answered
Gold prices fell from a record $5,450 an ounce in January to $3,942 by June due to the Iran conflict, rising oil prices, higher bond yields, a stronger US dollar, and heavy liquidation driven by Federal Reserve rate hike expectations.
Official sector purchases by central banks remain steady due to long-term diversification policies and geopolitical concerns, providing a strong floor for prices. Institutional demand has also held up well, supported by regulatory changes in India and China.
HSBC notes that gold may rebound in 2027 if the Federal Reserve's rate path turns out less aggressive than expected. Similarly, JPMorgan forecasts that international gold prices could reach $5,000 an ounce by the middle of 2027.
