- 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
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
NZD/USD holds steady above multi-week low, looks to RBNZ for fresh impetus
NZD/USD consolidates below mid-0.6100s as traders opt to wait on the sidelines ahead of the Reserve Bank of New Zealand rate decision. Heading into the key central bank event risk, expectations for a jumbo RBNZ rate cut fail to assist the pair in capitalizing on the overnight bounce from the 0.6100 mark, or a four-week low.
AUD/USD faces the next support at 0.6700
AUD/USD retreated further and approached the key 0.6700 contention zone, where some initial support seems to have turned up, always against the backdrop of a persistent risk-off mood in the global markets.
Gold price slips on Middle East truce calls, clings above $2,600
Gold prices slumped sharply on Tuesday following a strong US jobs report and newswires revealing that Hezbollah supported calls for a truce in the conflict between them and Israel. Hence, hints of a possible de-escalation of the Middle East conflict opened the door for traders to book profits.
RBNZ seen cutting key interest rate by 50 bps in October amid deepening economic downturn
The Reserve Bank of New Zealand is expected to cut interest rates by 50 bps to 4.75% on Wednesday. New Zealand’s deepening economic downturn and inflation optimism flag outsized RBNZ rate cut bets.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.