The gold market is in a holding pattern within striking distance of $1,900 an ounce, and one firm sees the potential for higher prices, but the momentum might not last through the end of the year.
In an updated gold report published Wednesday, analysts at Fitch Solutions said that they remain bullish on gold for this year but added that the precious metal could struggle in 2022 as inflation pressures start to wane.
“We expect further gains (to gold) in the coming months amidst rising inflation pressuring U.S. treasury real yields, a weak U.S. dollar, and renewed waves of COVID-19 infections,” the analysts said in the report.
Although the firm remains bullish on gold, the analysts said that they were not updating their average price forecasts for this year.
“For now, we maintain our 2021 gold price forecast of USD1,780 per oz, with prices having averaged USD1,804 per ounce year to date and hovering around USD1,900 per oz,” the analysts said.
The analysts said that gold‘s record highs above $2,000 an ounce, hit last year, could prove to be significant resistance this year.
Next year, Fitch Solutions is not an optimist on gold as they see prices averaging the year around $1,700 an ounce.