We expect gold to lose some of its lustre as real yields rebound

While the recent rebound in the price of gold may owe something to greater demand for safe havens in response to faltering equity prices, as well as to cryptocurrencies coming under pressure, most of it can probably be explained by a marked pull-back in the real yields of long-dated Treasuries after their surge earlier this year. We doubt the pull-back will last, though, and are sticking to our forecast that the price of gold will end 2021 at $1,600/oz., which compares to a level at the time of writing of ~$1,867/oz.