Gold Ready for Short-Term Suffering for a Higher Goal

The article says gold (XAUUSD) may undergo short-term weakness as markets weigh Middle East geopolitical developments and potential inflation-driven central bank tightening, but remains positioned for higher prices later. Standard Chartered forecasts a Q2 average of $4,605/oz before a rebound to $4,850/oz in Q3. HSBC highlights ongoing central-bank buying, concerns over the US budget deficit and financial stability as structural supports. Geopolitical shocks (Strait of Hormuz reopening, seizure of an Iranian tanker) have driven recent monthly highs and pullbacks; the piece outlines two scenarios: an end to the conflict that eases inflation and limits rate hikes (supportive if real yields fall), or a prolonged conflict that lifts oil and prompts recession risks and large monetary stimulus (also bullish for gold). Overall, short-term downside risk exists, but medium-term drivers point to upside for gold.