RBC with the note:
We have stuck to our quarterly gold price forecasts based on our view that risk has been more skewed to the downside (under appreciatedly so) for some time, particularly concerning the market’s expectations for the Fed as more economic data is released amid today’s unique market environment and both direct and indirect implications for gold play out. With gold now having declined notably in recent trading days and now much closer to our Q3 2021 forecast, we highlight our view that gold is entering a much fairer range (in line with our outlook) but beyond that, that gold should find some support if/when it were to dip materially below our base case forecast.
We have long said that gold was subject to some underappreciated downside risks, despite the market narrative having focused more on the potentially gold-positive aspects of inflation rather than the potential direct and indirect downside risks elsewhere. Despite what we view as a more focused popular narrative, economic data, changes in the market’s expectations for monetary policy (i.e. eventual tapering), and shifting risk appetite all matter, and for the most part line up with our view.