Gold is having a hard time bouncing above $ 1,900. Nevertheless, analysts believe that by the second half of 2021, the yellow metal will undergo a much larger growth, as investors will be less stressed when approaching the resistance level.

In fact, during the recent test of $ 1,900, gold's net length was already 17% higher. Gold-backed ETPs were also 4% higher (142 tons), and the investor position was much higher.

But ETP data says the level will remain a strong resistance for quite a long time, unless inflationary expectations jump much higher, and dollar and US Treasury yields drop much lower.

Accordingly, gold will decline if the Federal Reserve begins to consider early rate hikes, which Standard Chartered believes could happen by August this year.

Markets, on the other hand, are expecting a rate hike by March 2023. Discussions on this may happen at the June FOMC meeting.

Another factor that fuels the price increase is the growing physical demand for gold. Latest data shows that many central banks continued their net purchases, pushing the total to 168 metric tons.

In April, banks bought a total of 68.2 tonnes, following the 91-tonne net purchase in March. Kazakhstan and Uzbekistan continued to increase their reserves as well.

As for Turkey, it resumed buying gold after selling for the last five months. Meanwhile, Thailand added 43.5 tons to its gold reserves.

China also raised its gold imports to 110.8 tonnes, 4.2 tonnes higher than a year ago.

Exports from Switzerland increased as well, particularly on shipments to Hong Kong, China, US and UK.

But in light of the recent increase in COVID-19 cases, data for May might indicate a slowdown in gold demand, especially in India. Figures may boost in the second half of 2021.