Gold’s limited gains in 2021 despite low rates and high inflation prints does not bode well for its prospects. Notwithstanding this, strategists at Société Générale still see the yellow metal rising moderalery in the near-term. For the next year, XAU/USD is set to hover around $1,750.
See – Gold Price Forecast: XAU/USD to see further falls towards $1774 – Commerzbank
XAU/USD to soar to $2,100 in the downside economic scenario
“We still remain slightly supportive in the near-term as we expect monetary and fiscal policy to remain highly accommodative but our conviction levels are simply pinned to our expectation that ETF outflows do not continue and we have some moderate inflows by the end of the year.”
“With positive economic readings and in particular, positive jobs data market participants appear to be focused on the prospect of an earlier than anticipated interest rate hike. While real rates are still expected to be negative, any expectation that this could turn positive faster would really dampen investment flows.”
“Our base case scenario is for gold prices to average $1,750 on average in 2022 as investment flows drop further.”
“In the upside price scenario (which is the downside economic scenario), we forecast prices rising to $2,100/oz whereas the downside risk to prices (on the upside economic scenario) is limited and prices could fall to $1,600/oz.”
