FXStreet reports that strategists at Capital Economics expect the precious metal to fall further as the US real yield curve continues to steepen.

“Short-dated real yields have fallen amid repeated signals from the FOMC that monetary policy is likely to remain very loose for a long time yet. By contrast, long-dated real yields have risen. This pivoting of the real yield curve has been accompanied by a slump in gold. Our expectation is that the US real yield curve will continue to steepen. Indeed, we suspect that most of the ~50bp increase we project in the nominal yield of 10-year conventional Treasuries between now and the end of this year will result from a higher real yield. We expect this to heap more pressure on the price of gold. Our end-2021 forecast for the price of the yellow metal is $1,600/oz.”