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.

Omkar Godbole FXStreet Contributor

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

XAU/USD

Overview
Today last price	1826.08
Today Daily Change	8.18
Today Daily Change %	0.45
Today daily open	1817.9

Trends
Daily SMA20	1838.65
Daily SMA50	1858.33
Daily SMA100	1868.69
Daily SMA200	1857.97

Levels
Previous Daily High	1827.11
Previous Daily Low	1816.16
Previous Weekly High	1855.5
Previous Weekly Low	1807.86
Previous Monthly High	1959.42
Previous Monthly Low	1802.8
Daily Fibonacci 38.2%	1820.34
Daily Fibonacci 61.8%	1822.93
Daily Pivot Point S1	1813.67
Daily Pivot Point S2	1809.44
Daily Pivot Point S3	1802.72
Daily Pivot Point R1	1824.62
Daily Pivot Point R2	1831.34
Daily Pivot Point R3	1835.57

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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