FXStreet reports that in the view of economists at Capital Economics, the real yields of long-dated Treasuries are set to rise, subsequently, XAU/USD should retreat during the remainder of this year.

“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.”

“The retreat of real yields of long-dated Treasuries so far in the second quarter of 2021 probably reflects a feeling that good news on growth – after a successful vaccine rollout and huge fiscal stimulus – is largely discounted and might be hampered by supply shortages. We don’t expect it to continue, though, which leads us to expect that gold will lose some of its lustre.”