Get 40% Off
🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Citi sees more upside for gold; points to $3,000/oz

Published 16/04/2024, 11:08
© Reuters
XAU/USD
-

Investing.com - Gold has taken a breather Tuesday after climbing over the past couple of weeks to record highs as safe haven demand remained underpinned by concerns over worsening geopolitical tensions, and Citi sees the potential for $3,000 an ounce.

AT 10:05 ET (14:05 GMT), spot gold traded 0.5% lower at $2,370.27 an ounce, remaining close to Friday’s record high of $2,431.53 an ounce.

The yellow metal’s recent run-up was driven largely by worsening geopolitical tensions in the Middle East, after Iran attacked Israel over the weekend.  

An all-out war between the two countries could potentially draw in other Middle Eastern powers, as well as the U.S. and its allies. 

Fears of such a scenario fueled demand for gold, which is seen as a traditional safe haven for its relative price stability, especially in times of global strife.

The yellow metal was also supported by central bank buying over the past year, especially in emerging markets, amid growing fears of a global economic downturn in 2024.

“The recent gold rally has been aided by geopolitical heat and is coinciding with record equity index levels; so a steeper risk-off environment should further boost prices,” said analysts at Citi, in a note, dated April 15. 

“More importantly, the bullion complex has de-coupled from US rates and the US dollar, suggesting robust physical consumption drivers (eg, India/China imports, bar/coin), alt-fiat demand, geopolitical hedging, and CB buying are supporting the market.”

The bank has lifted its baseline gold price forecasts to the bull-case scenario, and for 2024 this means a 6.8% bump to $2,350/oz; for 2025E, this means an admittedly massive 40% upward revision to $2,875/oz. 

“We project $3,000/oz gold over the next 6-18m, which is c20% above the forwards and 25%+ north of spot. We expect trading to regularly test and breach $2,500/oz in 2H’24,” the bank added.




Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.