Gold could drop below $1,800 by the end of 2021 – Morgan Stanley
- Gold could drop to sub-$1,800 levels this year, according to Morgan Stanley.
- Weak inflation and global economic recovery could weaken demand for the yellow metal.
Analysts at the investment banking giant Morgan Stanley foresee gold falling below $1,800 per ounce by the end of 2021 as the rise in inflation is likely to be tepid at best.
"Morgan Stanley's economists forecast the US inflation to rise a little over 2% over the next two years. So this is hardly the runaway type of scenario for inflation that gold would seem best suited for," Andrew Sheets, Chief Cross-Asset Strategist for Morgan Stanley, said in a recent report, according to Kitco News.
Sheets added that gold's momentum looks weak, and signs of global economic recovery could complicate matters further for the safe-haven yellow metal.
Morgan Stanley sees the US economy growing 6.5% this year, followed by 5% growth in 2022.
Gold is currently trading near $1,826 per ounce at press time, representing a nearly 4% year-to-date decline. Prices reached a record high of $2,075 in August 2020.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
