Gold has managed to maintain its ground recently and remains above the $1900 level on the back of stronger-than-expected hard data on both sides of the Atlantic. But markets are of course forward-looking and though recent strength has offered some momentum and the “inevitable recession” keeps getting postponed, markets are nonetheless expecting inflation to decelerate and central banks to change course in the coming months. If so the historic downsizing of balance sheets will be done already (the temporary bottom was so far in during Q4-2022).

Chart 1: DM Central Banks Balance sheets YoY in USD
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