FXStreet notes that aside from rising supply, commodity prices face a number of other headwinds over the next year including the prospect of a stronger U.S. dollar and higher US Treasury yields. Against this backdrop, strategists at Capital Economics expect that the price of gold will fall.

“We have become more negative on the outlook for the price of gold. The gold price has already fallen a long way from its 2020 peak in tandem with higher real yields in the US.” 

“Given the rapid progress on vaccinations, large fiscal stimulus, and the Fed’s apparent willingness to accept higher long-term interest rates, we doubt it will be long before real yields start to rise again.” 

“We expect the price of gold to trend lower over the next couple of years.”