Gold outlook

Gold prices are up notably so far this year, boosted by the twin factors of Ukraine-relatedgeopolitical risk and persistently high inflation. The rise in risk is generating considerablesafe-haven demand in the guise of ETF and coin & bar purchases. While the escalationin geopolitical risk may keep gold at a higher level than would otherwise be the casegoing forward, a reduction in geopolitical tensions could trigger a pullback. High pricesare also eroding non-investment demand and may leave gold overextended to theupside. The rise in inflation is buoying retail and institutional demand but should inflationmoderate, investment demand in 2H 2022 may ease. We raise our 2022 average goldprice forecast slightly to USD1,820/oz (from USD1,780/oz) and to USD1,750/oz(from USD1,715/oz) for 2023. Our 2024 and long-term average price forecasts areunchanged at USD1,675/oz and USD1,600/oz respectively.