Gold: More weakness in the near-term before soaring to $2,000 next year – ABN Amro
|Gold prices have struggled lately. A weaker dollar has supported the yellow metal somewhat but more investors have taken profit recently. Investors are now less convinced of another rise above $2,000 per ounce and are set to continue taking profits. However, economists at ABN Amro expect XAU/USD to race higher towards $2,100 in 2021.
See: Gold needs to clear the $1,973 September high to resume the uptrend – Standard Chartered
Key quotes
“Despite the modest profit-taking, net long positions in the futures markets and the total outstanding ETF positions remain very large. In short, position liquidation risk is still there.”
“The US elections are approaching and we think that it is likely that more investors will take profit in gold for two reasons: First, more uncertainty could result in a more risk-off behaviour and thus liquidating long gold positions. Second, expectations of higher economic growth if Biden wins could temporarily support the dollar. As a result, gold prices will probably decline.”
“As the Fed will keep rates low for the coming years, US real yields will continue to be negative. This will support gold prices again in 2021.”
“Next year, we expect gold prices to move towards $2,000 per ounce again.”
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