Gold could drop below $1,800 by the end of 2021 – Morgan Stanley

• Gold could drop to sub-$1,800 levels this year, according to Morgan Stanley. 
• Weak inflation and global economic recovery could weaken demand for the yellow metal.

Analysts at the investment banking giant Morgan Stanley foresee gold falling below $1,800 per ounce by the end of 2021 as the rise in inflation is likely to be tepid at best. 

"Morgan Stanley's economists forecast the 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," Andrew Sheets, Chief Cross-Asset Strategist for Morgan Stanley, said in a recent report, according to Kitco News. 

Sheets added that gold's momentum looks weak, and signs of global economic recovery could complicate matters further for the safe-haven yellow metal. 

Morgan Stanley sees the US economy growing 6.5% this year, followed by 5% growth in 2022.

Gold is currently trading near $1,826 per ounce at press time, representing a nearly 4% year-to-date decline. Prices reached a record high of $2,075 in August 2020.

Technical levels