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(Wallace Refiners) – Precious metals analyst’s at Citi believe gold could be consolidating for some time. The investment bank said, “We expect that XAU/USD could mostly hover between the $1,700-$1,900/oz range for the balance of the year and average $1,800/oz in 2021.”.
They went on to add, “We see several peak cycle risks for the bullion market. These include risk of the US Federal Reserve tapering asset purchases by end-2021 and more aggressive short-term interest rate trading pricing for policy rate lift-off in 2022/2023 which may, in turn, be USD supportive.” and as it has been noted, “The rise in 10-year Treasury yields this year is also a headwind for a long duration zero-coupon asset like gold.”
When looking at some of the other beneficiaries in the commodities complex Citi said “A risk asset and commodities reflation narrative amid a COVID-19 vaccine trade could also favor inflows into oil, copper and other markets versus gold.”.
Looking at some other forecasts, Australian bank ANZ, “gold’s upside looks limited by rising yield and buoyant risky assets”. ANZ’s gold price prediction puts the precious metal at an average of $1,850 per ounce at the end of June, rising to $2,000 per ounce by the end of September, but then falling back to $1,900 by the end of 2021 and $1,800 by mid-2022.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Wallace Precious Metals The author has made every effort to ensure accuracy of information provided; however, neither Wallace Precious Metals nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Wallace Precious Metals and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
