Commerzbank: gold is likely to hit $1,850 by the end of 2023

Economists at Commerzbank expect that gold prices may drop to $1,750 at the beginning of 2023. Although, the yellow metal is likely to reach $1,850 by the year-end.

Experts predict a decline in gold prices to $ 1,750. The drop is going to continue until the cycle of interest rate hikes by the Fed is coming to its logical end. 

The Fed Fund Futures data suggests that the rate could peak at around 5%. Therefore, the market needs to adjust the Fed's rate outlook upwards, a move that could put pressure on the yellow metal's value. 

The regulator is likely to carry out the last interest rate hike seen in March. The rate is then expected to hold steady until the end of 2023, before the Fed cuts its key rate due to the weakening economy and declining inflation. So, gold is likely to move higher in the second half of 2023.

Strategists at Commerzbank believe that the U.S. dollar's potential weakening could also push up the yellow metal's value.

Thus, experts suggest a further rise in gold prices to $1,850, taking place in the second half of 2023.