Gold ETFs will face money flowing out in 2021

Investing in gold ETFs is likely to decline next year, according to Citi, which is revising its Gold Price forecast downward for 2021. Net inflows into gold ETFs are projected to hit 800 tons in 2020, which is 75 tons less than originally estimated. Plus, total inflows are expected to fall another 50% over the next year in 2021, Citi said in an email to customers. "The net investment in gold ETFs will reach 800 tons in 2020, 75 tons less than originally forecast and again 50% lower in 2021," the note said on Monday. The impact of the outflows from the exchange-traded funds was clearly felt in November when gold was sold, with the yellow metal falling below its key support level of $ 1,800 an ounce. The sell-off washed away many speculative and late long positions in gold, Citi said, noting that there was solid support at $ 1,700 an ounce. And while the $ 2,000 an ounce mark has not yet been ruled out, the price of gold could decline further as developed economies recover. "\[We\] are likely to see a move above $ 2,000 in the next 3 to 6 months, but if there is no fiat crisis then prices could move lower," said Citi. The bank is far more bullish when it comes to industrial metals, including copper. "\[We\] see that industrial commodity price increases indicate a rotation from risk averse to risky assets," the note said.