Bank of America (BofA) raised its 18-month gold price target to $3000 per ounce – 50% above the current price record.
The bank raised its forecast from the previous $2000 target as politicians around the world initiated massive financial and monetary stimulus to bolster their economies damaged by the coronavirus.
"When economic productivity contracts sharply, fiscal policy expands and central bank balance sheets double, fiat currencies may come under pressure. Investors are turning to gold."
analysts say in their report.
BofA expects the average price of the precious metal to be $1695 per ounce this year and $2063 in 2021. The current record of $1921.17 was set in September 2011. The spot price of gold has risen 11% this year.
However, a strong dollar, stabilized volatility in financial markets, and reduced demand for jewelry in India and China may pose headwinds for gold price development, says BofA.
"But in addition to the traditional principles of supply and demand for gold, economic regulatory measures have widely returned."
Translated and referenced from the original Bloomberg article
