Germany-based Commerzbank, in its latest investment report, highlights the struggles faced by precious metals markets in the midst of increased investor focus on soaring equity markets.
According to Daniel Briesemann, precious metals analyst at Commerzbank, gold will continue to remain under pressure, as long as the current environment persists without any major change. A further fall in gold prices in the short-term is not ruled out. The current difficult environment for gold is likely to continue until the middle of the current year. However, the bank does not expect a price collapse for the yellow metal.
The bank announced adjustment to its 2021 gold price forecasts. The latest update suggests that gold prices are likely to end Q4 this year at around $2,000 per ounce. This is significantly lower when compared with the earlier forecast of $2,300 per ounce. The recent collapse in gold prices has induced some buying momentum, it noted.
Although the bank foresees headwinds for gold prices in short-term, it continued to maintain its optimistic outlook in the long term. This is mainly on the assumption that central banks around the world may take several years for normalizing their monetary policies. Despite weaker investment demand, the prices of gold are expected to surpass the key levels of $2,000 per ounce before the end of the current year.