Curve flattening periods have usually led to the outperformance of precious metals. Economists at Citibank expect gold to surge above $2,100 over the coming months.

Macro backdrop favors investor inflows for gold

“The precious metals sector tends to outperform other commodity sectors during significant curve flattening episodes, based on rolling 6M annualized returns.”

“We believe there is a bit better than 50/50-probability that prices could post fresh nominal records in 2Q/3Q 2022 north of $2,100/t.” 

“Elevated geopolitical risks, COVID-19 concerns in China, and robust inflation data should all continue to tilt the macro backdrop to one that favors investor inflows for gold, at least in the short-term.”