According to Credit Suisse experts, gold has good prospects for growth in 2020.
“Despite the positive sentiment among investors amid rising stock markets, there is still uncertainty over the trade conflict between the US and China. Brexit also brings confusion. The global economy is on the verge. The situation may change in a negative direction at any moment,” they said.
Berenberg Bank has adjusted its forecast for the gold exchange rate for 2020 in the direction of its increase.
According to the bank’s calculations, the average cost of precious metals this year will be $1,525 per ounce, which is slightly lower than the current level – $ 1,560, but almost 3% higher than the previous forecast of the financial institute ($1,482 per ounce).
Analysts at Berenberg Bank point to the volatile geopolitical situation in the world, which is the main driver of the growth of the gold exchange rate. This includes trade negotiations between the United States and China, Britain’s secession from the European Union, as well as tensions between Washington and Tehran.
The bank believes that rising inflation in the United States could create conditions for a further reduction in interest rates by the Federal Reserve, and this, in turn, will support gold.
“Ultimately, inflation in the United States will begin to grow amid an increase in the state budget deficit and the country’s trade balance, which can happen very quickly or in ten years. But in any case, it is only a matter of time. If you look at the geopolitical struggle, how many companies want to accumulate dollars? Gold in this case becomes a favorite,” Saxo Bank said.
TD Securities experts believe that the price of gold will no longer fall below $1,550 per ounce, even if the military-political conflict between the US and Iran weakens, and investors are again interested in risky assets.
“We expect that in the near future precious metals will be traded in a narrow range. The mark of $1,600 per ounce is also becoming real, as the fundamental drivers remain valid. They will push the cost of precious metals up. The closer the US presidential election, the more expensive gold will become,” they said.
According to bank estimates, by the end of this year, an ounce of precious metal will cost $1,650.
The hedge fund Bridgewater Associates predicts that gold will be able to gain a foothold above the level of $1,540 per ounce, and in case of escalation of political conflicts, the cost of precious metal may even exceed $2,000 per ounce.