A surge in gold prices which could take the yellow metal to £1,666 ($2,200) is brewing says Australia and New Zealand Banking Group. The bank goes even further with its forecast for the very early part of 2021, noting that we shouldn’t consider the £1,666 ($2,200) threshold to be the ceiling as gold will continue to climb higher in to the New Year. It expects to see prices around the £1,742 ($2,300) mark in Q1.
Writing in the bank’s latest commodity report, issued earlier this week, ANZ analysts noted, “Approval of a U.S. relief package will be the trigger for price upside. The outlook for gold is extremely positive amid mounting economic concerns due to C-19 surges. Accommodative central bank policies and liquidity injections are broadly supporting the market.”
The bank also referenced the recent strength of the US dollar which has created a window to buy for investors, stating that it doesn’t appear to be here for the long term – giving a renewed urgency to buy now. The report added, “Recent strength in the U.S. dollar triggered profit booking in gold. That said, we see the backdrop as supportive, and the recent price setback is likely to be short-lived. We see gold remaining well supported leading into the U.S. election amid the high level of political uncertainty. This has already seen ETFs inflows increasing strongly. Gold-backed ETFs have experienced six straight days of net inflows, and are now up 34% this year alone.”
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