Bullion has stumbled in recent weeks in the face of multiple headwinds from surging real yields to a stronger US dollar and the prospect of US rates staying higher for longer. The survey of investors — from sovereign wealth managers to hedge funds — offered some modest optimism for price prospects into 2024.

None of the respondents said they would cut their exposure to gold in the immediate 12 months, and five of them said they expected to boost their allocations. More than two thirds of them see prices rising, and five expect a clear all-time high. The poll was conducted between 10 and 22 August.

There’s still obvious uncertainty around when the Fed will end the bank’s tightening cycle, which would be an important positive for non-interest bearing gold. Global central banks continue to grapple with stubborn inflation, and the US labour market has remained surprisingly resilient in the face of aggressive monetary tightening. 

While there’s some signs that investors are bracing for rates to stay higher for longer, the swaps market is still pricing in no more rate hikes, and a shift to policy easing next year. 

“We do anticipate there’s pent-up gold demand from investors waiting for the Fed to finish,” said Darwei Kung, head of commodities and portfolio manager at DWS Group. “That’s a positive set-up from our perspective.” He sees gold reaching a record $2,250 an ounce in the time period.

Bullion is currently trading near $1,900 an ounce, down about 8% from this year’s peak. It reached a record in August 2020 at about $2,075, in the midst of global economic turmoil triggered by the Covid-19 pandemic.

To be sure, economists are getting more confident that the US economy can glide to a soft landing, in a marked shift from widely-held views earlier this year that the economy would experience a sharp downturn. 

Safe haven

A separate survey also showed expectations for higher gold prices. Gold will trade at $2,021 per ounce 12 months from now, according to the median of 602 responses to Bloomberg’s Markets Live Pulse online survey of global readers conducted from 14 to 18 August.

The continued appetite for gold points to lingering worries about geopolitical tensions and macroeconomic uncertainties — for example, simmering tensions between the US and China, war in Ukraine, or what’s next for China’s property crisis. Other positive factors for gold include continued purchases by global central banks and relatively strong retail demand in emerging markets. 

Still, in the near-term, gold-watchers have plenty of reasons to be gloomy about the precious metal’s prospects. For the next clues on interest rates, investors will be paying attention to commentary from this week’s Jackson Hole gathering of central bankers. Fed chair Jerome Powell is due to speak on Friday. DM