Gold set for modest rally before easing in 2022

Gold set for modest rally before easing in 2022

BENGALURU- Gold prices will average a little above their current level of $1,830 an ounce for the remainder of 2021 before edging lower next year as the global economy recovers and central banks begin to tighten monetary policy, a Reuters poll showed on Thursday. Prices of the metal, traditionally seen as a safe store of wealth, surged to record levels above $2,000 an ounce early in the coronavirus crisis but sagged as economies reopened. "Safe-haven demand should fade further as global growth recovers and inflation turns out to be temporary," said Julius Baer analyst Carsten Menke. Central banks may also move towards raising interest rates, lifting returns on government bonds from their current rock-bottom levels and making gold, which offers no yield, less attractive. In the short term, however, prices are supported by factors including a recovery in demand for gold jewellery and the potential for the dollar to weaken as emerging markets rebound. A weaker greenback makes dollar-priced bullion more affordable. A recent uptick in inflation could also encourage investors to buy gold, often seen as an inflation hedge. Gold will average $1,835 an ounce in the third quarter of the year and $1,841 in the fourth quarter, according