Gold Price Forecast: XAU/USD to move downward on Fed tightening cycle – Citibank

Gold has consolidated in a narrow mid-$1,700/low-$1,800 range for several months with no clear bullish or bearish impulse driving overall momentum. Economists at Citibank expect the yellow metal to tick down as the Federal Reserve starts tightening cycle.

Bullion ETFs continue to show a net outflow bias

“Gold faces bifurcating risks, but base case trends lower on Fed tightening cycle.”

“Bullion ETFs continue to show a net outflow bias, capping prices. 2021 annual return is projected to be -9% to -10% in 2021, compared to 2019 and 2020 of 17% and 22%.”

“We remain bearish 2022 bullion markets as a base case, with $1,585/oz average, albeit with moderate conviction (60% probability) given significant uncertainty about global growth, the inflation outlook, and already rich valuations in equities and credit.”