AXA Investment: The Worst Is Over for Gold, Target Raised to $4,500
nashnova research
Europe's largest asset manager Amundi says gold has passed its worst phase, with a base-case rebound to around $4,500/oz in coming weeks — at least 10% above current prices — though the earlier $5,000 year-end target has been dropped.
Why did gold suddenly sell off?
Gold broke below $4,000/oz last week, hitting its lowest since mid-July.
Amundi's cross-asset strategy head Lorenzo Portelli says the main driver was broad deleveraging in AI trades — investors dumped gold to cover losses elsewhere.
This means → the drop looks more like collateral damage than a fundamental rejection of gold itself.
Why does Amundi say the worst is over?
Gold has fallen nearly 10% since September as hotter-than-expected inflation data cemented expectations of a Fed rate hike before year-end, weighing on the non-yielding metal.
Portelli argues the market has already fully priced the worst-case scenario: persistent inflation with no recession, forcing aggressive Fed hikes.
In plain terms = the scariest outcome is already in the price. The current economic outlook does not support hikes beyond what the market already expects, so the case for further steep declines is thinning.
What supports a rebound from here?
Trader positioning has been sharply reduced, which Portelli calls "favourable for a rebound in coming weeks."
Short-term pressure remains: gold ETF holders sold roughly 17 tonnes over the past three trading days as recent inflows reversed.
This reflects a tug-of-war between short-term fund flows and the longer-term trend — the very clearing of positions creates room for a bounce.
How has the price target changed?
Amundi previously expected gold to reach $5,000/oz by year-end; that call is now "no longer realistic."
The new base case: a rise of at least 10% from current levels to around $4,500/oz.
This means → the direction hasn't changed (still bullish), but the magnitude has been trimmed — more of a recovery than a fresh record.
What should long-term investors watch?
Portelli stresses that central-bank buying and other structural drivers remain intact. Markets will watch the World Gold Council's Q3 sovereign-purchase data closely.
Upcoming U.S. inflation prints will shape the Fed's 2027 policy path; a December hike is largely priced in.
His advice: "Be patient." He views current levels as a good entry for long-term holders — the key test is whether inflation and rate-hike expectations overshoot further before year-end.
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