Over the last several weeks, gold prices have been rallying in an attempt to surpass the decade’s record amid the coronavirus-induced market volatility. According to Citigroup analysts however, the gold market’s bullish factors could push prices to even further records amid increased monetary policy, rising ETF inflows, increased asset allocation, and low real yields.
Within the next six to nine months Citigroup analysts predict gold prices will reach their all-time high, with a 30% probability that an ounce of gold will rise to $2,000 in the span of the next three to five months. So far, nominal gold prices have been hitting new records across various G-10 and other emerging market currencies over the last year, and soon those record highs will reach the US dollar as well.
Citigroup is one of many market watchers anticipating that gold will crash through its record highs amid the current conditions. The alarming rise in coronavirus cases around the world, along with continued uncertainty surrounding a global economic recovery has caused spot gold to skyrocket by 19% this year as investors opted for a less volatile haven. Friday’s spot bullion prices reached $1,810.30 per ounce, which is not that far from the record of $1,921.17 set back in 2011.
The precious metal’s gains over the last six weeks come amid increased talks among governments over increased stimulus to hold up key economies. European Union governments have been negotiating an extensive rescue package and are expected to come to an agreement shortly. Meanwhile in the US, the White House is expected to begin talks on a second coronavirus stimulus package on Monday, while the Federal Reserve is anticipated to meet next week regarding further action in order to mitigate the growing economic fallout.
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Information for this briefing was found via Bloomberg and Citigroup. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
