KUALA LUMPUR: Gold prices are expected to recover next year as central banks approach the end of their interest rate hikes, making the precious metal more attractive to investors.
HSBC Asia FX Research head Joey Chew said gold had underperformed expectations this year despite heightened geopolitical tensions, as rising oil prices fuelled inflation concerns and raised expectations of further interest rate increases.
She said the relationship between gold and oil prices had shifted from positive to negative, with higher oil prices increasingly weighing on gold as markets anticipated tighter monetary policies.
"We actually have a situation whereby gold went from being positively correlated with oil prices to being negatively correlated with oil prices," she said at HSBC's foreign exchange investment outlook.
