Rates, Inflation and Gold

We are expecting the Federal Reserve to either officially employ Yield Curve Control (YCC) or provide further guidance at their September 16th meeting. What does this mean to gold? We expect to see US real yields drop into negative territory which, when looking at the opportunity cost of holding gold (yield earning investment vs. holding gold ), makes gold the more attractive investment. In the second quarter of 2021, we would not be surprised if gold tested the $1,950/oz price level. However, we do point out that inflation is unlikely to be considerably elevated (reaching a high of 2.2% in Q2 2020) hence putting a break at how low real yields can get .