The price of gold still has a long way to go

At the end of July, gold broke its record in 2011 and exceeded those highs, trading above $2,000 an ounce. However, there was a correction that worried investors. Analysts at major financial institutions remain optimistic. Besides, central banks keep a positive outlook about gold and believe that there is still a significant margin for a rise.

Manpreet Gill, an analyst from Standard Chartered, believes that the gold rally is not over yet. According to Gill, the recent correction in the precious metal price was the result of the rise in bond yields in the United States. The latter reflected the positive statement triggered by the news about the coronavirus vaccine. This rise put pressure on other assets, such as gold, and increased the so-called opportunity cost of owning metal.

Gill argues that, as long as bond yields remain below 1%, the gold rally will not be threatened. Central banks are going to do everything in their power to keep them low.

The yellow metal to touch $2,300

Fitch Solutions believe that geopolitical tensions and the slow pace of global economic recovery will continue to support the rise in the precious metal’s price.

The consulting firm has set its forecast for the average gold price at $1,850 an ounce for 2020. Fitch Solutions expects that, in the coming months, it may exceed the record it reached in August.

Analysts at the Swiss bank UBS are betting on a rebound in the price of gold. The value of the precious metal could even touch $2,300.

Citibank, in New York, has revised its forecasts on the price of gold. Now, it expects the price of gold to increase to $2,100 an ounce in the short term (6-12 months) and $2,300 in the long run. The US bank believes that the deterioration in relations between the United States and China will increase interest in safe-haven assets. At the same time, factors such as the weakening dollar and negative yields will continue to contribute to the rise in gold.

Citibank does not rule out even a rebound to $2,400 an ounce.