Citibank has joined other mainstream gold bulls calling for record gold prices.
Citi raised its gold price forecast this week. It now projects a three-month price of $1,825 per ounce and for the yellow metal to head into record territory in 2021. Citi analysts expect gold to eclipse the $2,000 mark early next year.
Citibank joins several other mainstream players that now project record gold prices in the coming months. Last week, we reported Goldman Sachs now forecasts record gold prices within the next 12 months and Bank of America released a note saying gold could break its US dollar record by the end of the year if it continues to breach key resistance levels.
Meanwhile, SGMC Capital Founder & CEO Massimiliano Bondurri told Bloomberg he thinks gold may hit close to $2,000 by the end of this year and could rally further due to dollar weakness.
It can rally much, much further than here, for a number of reasons. First of all, we expect dollar depreciation to continue, so that’s likely to benefit gold.”
And Edison Investment Research is even more bullish, saying gold has the potential to go as high as $3,000.
Gold has been on a strong run over the last couple of weeks as the number of coronavirus cases has surged. Bullion is up better than 12% in this quarter.
Safe-haven demand has given gold a boost, but the big driver is the Federal Reserve and its unprecedented money printing. As US Global CEO Frank Holmes recently pointed out, there is a strong correlation between the expansion of the central bank’s balance sheet and the price of gold. We’ve already seen the balance sheet balloon by over $3 trillion in response to the coronavirus pandemic and it currently stands at over $7 trillion. Holmes said he thinks the central bank will likely grow its balance sheet to $10 trillion before all is said and done. If history is any teacher, that could mean $4,000 gold.
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