Fed's catch-22 scenario; why gold price will shine in 2021

Gold last traded at $1,732 an ounce. Silver at $25.95 an ounce.

NEWS SUMMARY: Precious metal prices steadied Tuesday on mixed economic data and a firmer dollar. U.S. stocks traded mixed with tech getting a boost from Apple while the Fed began their 2-day March meeting.

Day/Kitco-"Adrian Day, president of Adrian Day Asset Management, said in a recent telephone interview with Kitco News that gold's time in the sun is not over, even as momentum has waned a little.

Rising bond yields and a new focus on base metals like copper as economic growth expectations continue to pick up have taken a toll on gold. However, Day said that the precious metal remains an attractive asset. He added that he expects the market is close to a new cyclical low.

'If you took out one-year, three-year, or even six-month view, I am extremely positive on gold,' he said. The comments come as gold prices continue to hold support above $1,700 an ounce after bouncing off a 10-month low last week...Day said that investors need to look at the recent price action in a much broader context. He noted that gold's consolidation came after prices rallied nearly 40% from their lows seen one year ago.

'The reason this consolidation has dragged on so long, frankly, is simply because the move last year was so extraordinary,' he said. 'You had this explosion, it took us way above the trendline, and it pulled in all sorts of buyers for all sorts of reasons'....

He added that sentiment could once again shift in gold's favor as inflation pressures pick up and keep real interest rates in low to negative territory. Day noted that the rise in nominal 10-year yields would soon take its toll on the U.S. economy."