Gold Prices Likely to Fall as Short-Term Liquidity Needs Outweigh Investment Case – Saxo Bank’s Hansen

Saxo Bank’s Ole Hansen notes that gold’s resilience faces a tough test from a break below the 4230 level, surging Treasury yields and a stronger dollar, leaving ETF demand as the main support.

The weakness stems from real yields hitting an 18-year high near 2.85% and markets pricing in three more 25-basis-point Fed hikes by April. Hansen highlights that ETF holdings keep recovering despite the rate pressure, yet short-term liquidity needs could trigger selling.

Higher yields may boost longer-term gold demand as protection against fiscal risks, but an acute liquidity squeeze could initially force sales to meet margin calls, as gold offers a deep and liquid market for raising cash.