Gold is holding up well near the $2,200 mark. Economists at Commerzbank analyze the yellow metal’s outlook.

The market seems to be underestimating the risk that rate cuts will come later and be less substantial

Even hawkish comments from the Federal Reserve do not seem to be affecting the precious metal. Only Wednesday, Fed Governor Christopher Waller stressed that recent economic data would warrant a delay or a reduced amount of interest rate cuts. The market therefore seems to be underestimating the risk that US rate cuts will come later and be less substantial. 

Although the median of the top Fed officials' rate projections was unchanged at the last meeting, the distribution showed that only a few of them would have had to upgrade their rate expectations to push the median higher as well.