The Swiss bank, Credit Suisse, believes that in 2021, the price of gold may rise to $2,200 per troy ounce. The bank's experts suppose that the current Fed’s policy and low interest rates will support the growth in the precious metals market. Credit Suisse recommends monitoring the rise of US Treasury yields and the monetary policy of the Federal Reserve. However, the Fed is highly unlikely to make bigger changes to its current policy. The regulator is now primarily focused on tackling the employment issue rather than slowing down inflation.
According to analysts at Citigroup, the growth of the precious metals market was limited by the rally of bitcoin. The digital asset overshadowed gold. So, many investors decided to increase their investments in the virtual asset. Currently, bitcoin brings higher returns than gold. Citigroup lowered its previous annual forecast for gold from $2,100 to $1,950 per troy ounce.
Experts at Goldman Sachs downgraded the gold price forecast for 2021 due to a number of negative factors such as economic turbulence and the difficult epidemiological situation around the world. Analysts assume that in the next 12 months, gold will fall to $2,000 per troy ounce, although the previous forecast projected a gradual increase to $2,300.
According to the calculations of Standard Chartered, the current monetary policy of the Federal Reserve will lead to cheaper gold. Notably, the US dollar has been quite steady for several weeks, although the Fed's monetary policy has not been the reason for it. Currently, the Fed is trying to revitalize the country's economy and boost inflation. These measures constrain the rise of the US currency but support gold. Standard Chartered analysts consider the key support levels for gold to be $1,765 and $1,680 per troy ounce.
CIBC also revised downwards its positive outlook for gold. Analysts are certain that gold may show muted growth in the near future. According to the bank's calculations, in 2021, the average price of gold will total $2,100 per troy ounce. Previously, CIBC projected the price of gold to amount to $2,300 per troy ounce. Currently, it is almost impossible for gold to stabilize and trade in more or less the same range. As a result, market volatility increases. CIBC experts attribute this to the rising optimism of investors amid the quicker recovery of the global economy.