Currently, gold prices are under pressure as the metal is trading below 50 and 200 EMA. However, we are still bullish in the long-term as price risk remains upwards. The macro-environment remains supportive of higher prices in light of the weaker US dollar projections, negative real yields and more US stimulus. There are also higher chances of inflation coming this year which will be beneficial for gold prices. Moreover, retail demand has picked up and India has cut custom duty so there are chances of physical gold demand going up this year. Physical demand fell to a 11-year low in 2020. Central banks are expected to remain net buyers in 2021 despite official reserve demand tumbling to a 10-year low in 2020. Going forward, gold will continue to take price direction from the US dollar and real yields as the Federal Reserve remains dovish.
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