From Financial Modeling Prep: 2025-04-01 06:06:00

HSBC analysts predict gold prices could rise due to economic concerns, stagflation risks, and fiscal instability. During a potential U.S. recession, a risk-off environment may lead to a weaker dollar, lower Treasury yields, and a decline in risk assets, prompting investors to turn to gold as a safe-haven asset.

Stagflation, a mix of slow growth and persistent inflation, could further boost gold prices. HSBC anticipates that under stagflation, Treasury yields will stay low, dollar movements will be unpredictable, risk assets will decline, and gold will see stronger gains, highlighting gold’s inflation-hedging properties.

Growing worries over U.S. government debt and fiscal policies may also support gold prices. Possible triggers include further tax cuts or fiscal expansion, rising U.S. debt levels, weakening investor confidence, and a weaker dollar, making gold more attractive as a safer alternative to U.S. Treasuries.

HSBC notes that the current market correction is primarily U.S.-driven, unlike typical global risk-off events. This unique situation could further bolster gold’s appeal as a safe-haven asset amidst potential recession, stagflation, and fiscal instability in the U.S., potentially outperforming the U.S. dollar and Treasury bonds in the near future.



Read more at Financial Modeling Prep:: HSBC: Three Key Scenarios That Could Push Gold Hig…