The head of Asian interest rate and foreign exchange strategy at J.P. Morgan Chase Private Bank said in an interview that after a recent round of sell-off, gold still faces downside risks, market liquidity is poor, and interest rates still have room to rise. Gold will only build a solid bottom when interest rates peak, she said. The bank expects the Federal Reserve to raise interest rates in December and the first quarter of 2027, driving the 10-year US Treasury yield slightly above the current level of 5% and peaking at 5.25% to 5.5% in the middle of the year. Higher yields will reduce the investment appeal of gold, an interest-free asset. However, she believes that once the Federal Reserve ends its austerity cycle, gold is expected to strengthen sharply later next year because of its long-standing demand as a hedging tool for economic and policy risks.

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