Gold prices have trended lower since the start of 2021, amidst rising US treasury yields and an increasingly positive outlook for the economic recovery.
Investor sentiment towards gold has also continued to ease significantly in recent months following the rally recorded in H120 and the peak in prices reached in August last year.
Gold prices could remain supported over March-April as inflation will likely pick-up and could rise faster than bond yields sending real bond yields even in more negative territory, market analyst Fitch Solutions predicts in its latest industry report, adding that this will likely push real interest rates lower in the near term, temporarily boosting the appeal for gold.
Fitch forecasts gold prices could see some volatility in the coming weeks as financial markets assess incoming inflation readings.
However, the analyst believes gold prices will trend lower on a six-to-twelve-month horizon given its expectations for bond yields to rise this year and as macroeconomic uncertainty eases.
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