An employee handles a kilogram of gold bars at the headquarters of YLG Bullion International Co. in Bangkok, Thailand, on Friday, December 22, 2023.
Chalinee Thirasupa | Bloomberg | beautiful images
Gold prices continued to hover near record highs in the days after tensions in the Middle East flared, boosting the appeal of bullion as a safe haven.
Gold prices notched another record on Monday, with the most actively traded June gold futures contract up 0.37% to $2,383 an ounce and some saying there is more room for upside. .
“The recent gold price rally is supported by geopolitical heat and coincides with record equity index levels,” Citi wrote in an April 15 note.
Demand for safe-haven assets increased amid escalating tensions in the Middle East after Iran opened fire 300 drones and missiles attack Israel – most of which have been blocked, thanks to Israel Iron Dome air defense system.
Market watchers are watching closely ability to retaliate by the Jewish state, which has vowed to “expose an exact price” from Iran.
A significant retaliation could lead to a broader conflict, which in turn would trigger new gold buying, as well as prices, said Bartosz Sawicki, market analyst at financial services firm Conotoxia fintech. Oil rose and the US dollar strengthened.
We predict gold will reach a price of 3,000 USD/oz within the next 6-18 months.
Gold price from the beginning of the year
Even so, analysts remain optimistic about the yellow metal’s prospects, buoyed by continued physical demand as well as its appeal as a geopolitical hedge.
“We expect gold to reach $3,000/oz in the next 6-18 months,” said Citi analysts led by Aakash Doshi, head of commodities research for Citi North America. Citi said the “floor price” of financial gold has also increased from about $1,000 to $2,000 per ounce.
On Friday, Goldman Sachs called the gold market an “inexorable bull market” and revised up its price target for the yellow metal from $2,300 an ounce to $2,700 by the end of the year.
– CNBC’s Gina Francolla contributed to this report.
