The catalyst that could take gold price to $2,100

Gold last traded at $1,728 an ounce. Silver at $26.43 an ounce..

NEWS SUMMARY: Precious metal prices fell on technical selling as higher interest rates boosted the dollar. U.S. stocks sold off for a second day as Wall Street struggled to shake off fears of rapidly rising bond rates.

ANZ/Kitco--"One catalyst could turn things around and take gold prices as high as $2,100 this year, according to Australia and New Zealand Banking Group (ANZ).

Gold is back below $1,800 an ounce this week as prices struggle to maintain gains amid rising Treasury yields....Despite this lackluster performance, ANZ remains positive on gold, citing one specific driver that could boost gold back to its record highs.

'The real instigator of another leg up in prices will be the expectation around inflation, and certainly that is something that is raising heads of late,' ANZ senior commodity strategist Daniel Hynes. 'We are starting to see energy prices rise. Freight container rates and shipping costs are also rising quite strongly. We saw PPI in China pick up recently. There is some concern that higher prices will start to manifest itself through the global supply chain as the global economy improves.'

Right now, markets are not paying enough attention to inflation concerns, Hynes said, noting that this might change in the medium-term.

'Inflation story is bubbling away in the background, but it will start to gain more focus for investors. Inflation expectations are picking up, which would provide a solid support for investor demand over the medium term. That will continue to benefit the gold sector,' Hynes said.

The Federal Reserve reiterated multiple times that it does not see inflation as a concern and is willing to let it run higher. This sets up an advantageous scenario for gold in the long-term.

'The Fed said they would rather see things overshoot. That is going to give plenty of scope for the continued reflation trade to play out,' Hynes said.

On top of the inflation factor, low interest rates along with more monetary and fiscal stimulus will keep gold prices elevated this year. 'Our year-end price targets for gold is $2,100,' Hynes said."