Amy Gower Says Gold Faces Rate and Dollar Headwinds

Gold prices face significant pressure from 20-year high bond yields and a strengthening US dollar, yet the metal maintains a resilient floor above $1,800 an ounce. Amy Gower of Morgan Stanley attributes this stability to robust physical demand, noting that China's gold imports are ten times higher than official central bank additions. While the Federal Reserve's tightening cycle typically triggers exchange-traded fund sell-offs, holdings have unexpectedly increased through September. Central bank activity remains a critical anchor, with a projected annual buying rate of 800 to 1,000 tons led by aggressive acquisitions from Poland and China. Despite anticipated short-term volatility driven by US economic data and fiscal sustainability concerns, price targets suggest a climb toward $2,300 by the second half of 2025 once the current interest rate hiking cycle concludes.