HSBC raised its 2025 average gold price forecast to $3,215 an ounce from $3,015 and its 2026 forecast to $3,125 from $2,915, citing elevated risks and government debt.
Gold tends to perform well during periods of economic uncertainty and geopolitical tension, which lifted spot gold to a record high of $3,500.05 an ounce in late April.
Spot gold was trading at $3,348.50/oz at 1146 GMT on Tuesday.
“We anticipate a wide and volatile trading range of $3,600-3,100/oz for the rest of the year and year-end prices of $3,175/oz for 2025 and $3,025/oz for 2026,” the bank said in a note on Tuesday.
U.S. Senate Republicans on Monday evening were still trying to pass President Donald Trump’s sweeping tax cut and spending bill despite divisions within the party about its expected $3.3 trillion hit to the nation’s debt pile.
Meanwhile, Treasury Secretary Scott Bessent warned that countries could be notified of sharply higher tariffs as a July 9 deadline approaches.
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HSBC said that even if gold prices ease, levels above $3,000 an ounce have reinforced gold’s role as a safe haven and effective portfolio diversifier.
It noted that central bank gold purchases will moderate on further rallies above $3,300 and could increase should gold correct nearer to $3,000.
On the physical front, the bank said further gold price gains above $3,500 could lead to reduced demand in the jewellery, coin and small bar markets, particularly in economies such as India and China.
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