Global gold prices risk coming under pressure and moving lower in the near term as the Federal Reserve is poised to tighten its monetary policy, according to Yuxuan Tang, Head of Asia Rates and FX Strategy at JPMorgan Private Bank, Bloomberg reports. The US central bank recently raised borrowing costs for the first time in a long while in response to a spike in domestic fuel prices, pushing the funds rate up to 4%.
The analyst believes the Federal Reserve will not stop at a single move and will deliver more rate hikes in December and in Q1 2027. That scenario would lift 10‑year US Treasury yields toward a local peak of 5.25–5.5% by mid‑next year from current readings just above 5%. As Denis Astafyev, founder of fintech platform SharesPro, notes, rising yields on risk‑free sovereign debt typically weigh on investment demand for precious metals: when interest rates are high, demand for gold weakens because bullion yields no coupons or dividends.
However, analysts view the current weakness in gold as a temporary phase that will be followed by a strong uptrend once the tightening cycle ends. Yuxuan Tang reckons that after the funds rate peaks, investor demand for safe‑haven assets will help trigger a sharp rally: exchange‑traded quotes for the precious metal could reach $4,500 per troy ounce by mid‑2027 and climb to $5,000 by the end of December. Gold is currently trading on global exchanges around $4,060/oz.
