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Analysts at Citibank tampered their projections on gold and the medium-term average trading range from $2,100-2,200/oz to below $2,000/oz given new monetary policy risks and what may be a much stronger growth profile during the second half of 2021 with vaccine distribution.

Key Quotes:

“The acceleration of the gold sell-off in recent trading sessions occurred despite a push lower in real yields at the belly of the UST curve and a weaker US$. This likely alludes to a position squeeze and technical unwind as opposed to a market regime shift. A bearish US$ outlook and low real rates are tailwinds supporting historically high nominal gold prices. We look for a final bullish hurrah in gold prices this cycle toward $2,000/oz before moderating the price outlook into 2022.”

“Gold have regained the pivotal support range at 1791 – 1803, consisting of key horizontal levels and a 200d MA as well as completing a morning star formation that could be a signal that Gold has bottomed. It may find the support and resistance at 1765 and 1879 respectively in the short term.”