ANZ Bank views the recent pullback in gold from its peak near $3,500 per ounce as a temporary correction that presents a clear buying opportunity. Even with signs of improving US-China relations, a mix of economic and market dynamics continues to point toward higher gold prices. Notably, US GDP contracted in Q1—the first decline since 2022—and inflation expectations have moved higher, rising to around 6.7% as tariff pressures feed through to consumer prices. At the same time, markets are pricing in the potential for substantial Federal Reserve easing, with expectations of cumulative rate cuts approaching 100 basis points, a backdrop that typically favors non-yielding assets like gold.
Demand metrics reinforce ANZ’s constructive stance. Global gold demand in the first quarter reached its strongest level since 2016. Investment demand surged, climbing roughly 170% year-over-year, and exchange-traded fund (ETF) flows turned positive after a period of outflows. Central banks continued to accumulate gold as part of reserve diversification strategies, providing a steady bid in the market. Conversely, jewelry purchases slowed amid elevated price levels, but this softer consumer demand has not outweighed the strength in investment and official-sector buying.
Given these dynamics, ANZ maintains a year-end price target of $3,600 per ounce. The bank highlights a $3,000–$3,200 per ounce range as a key support zone that is likely to attract renewed investment interest if prices revisit that territory. In ANZ’s view, the combination of cyclical risks to growth, persistent inflationary pressures and an eventual shift toward easier monetary policy creates a favorable medium-term environment for gold.
Investors watching the precious metals complex should note the following considerations: cyclical economic data can prompt short-term volatility, while longer-term drivers—central bank accumulation, elevated inflation expectations and expectations of lower real yields—tend to support higher prices. The recent correction, therefore, may offer an entry point for those looking to add exposure on weakness, particularly if gold approaches the identified support band.
In summary, ANZ interprets the recent drop from the $3,500/oz high as a corrective move rather than a reversal of trend. Strong first-quarter demand, resilient central bank buying and a macroeconomic backdrop that may erode real yields underpin the bank’s $3,600 year-end target, with $3,000–$3,200 marked as the most likely zone to draw fresh investment should prices fall back to those levels.