FXStreet reports that Andrew Sheets, Chief Cross-Asset Strategist for Morgan Stanley, believes that inflation will rise, but that the gold price will fall.

“Morgan Stanley's economists forecast US inflation to rise a little over 2% over the next two years. So this is hardly the runaway type of scenario for inflation that gold would seem best suited for.”

“Gold is an asset where the narrative matters. In 2021, the pandemic looks set to get better. Economic data is improving. Politics have become calmer. And interest rates are starting to rise.”

“As for gold, we forecast a price a little under $1,800/oz. by year-end; implying further declines from current levels even as inflation rises.”