Citi on gold in 2021 - to see highs toward US$2,100/oz
A snippet from Citi's outlook for the coming year.
- Citi analysts look for gold prices to move toward US$2,100/oz over the next 6-9 months, before moderating in 2022.
- Overall, gold prices could average US$1,900/oz in 2021.
- A depreciation in the USD could catalyze gold investor inflows, coupled with a rebound in Emerging Market retail demand.
- record $16.5 trn in global negative-yielding debt, the opportunity cost of holding a zerocoupon asset like gold has also significantly diminished.
- positive vaccine developments on the COVID-19 front ... could slow but not end the gold market bull cycle, so long as the Fed's monetary policy stays accommodative at the zero lower bound - commits to dovish forward guidance and continuing with its QE program.
- This is Citi analysts' base case for 1H 2021. However, wider vaccine distribution and a growth recovery may see a moderating of prices and QE in 2H 2021.