The Bank of America has become the latest big name to forecast a $2000 price level for gold this week – making another compelling argument to buy now. The precious metals analyst at Bank of America Securities, Michael Widmer said yesterday (Thursday) that the escalation of coronavirus to a pandemic would push gold to $2000 levels.
The bank’s forecast for gold is also strong regardless of whether coronavirus spreads further, with Widmer saying there are also other very strong medium and long term factors in favour of gold, meaning its original $1700 prediction for end of year stands even without a pandemic.
In his report, the analyst said, “It is worth keeping in mind that our bullish base case outlook is not necessarily predicated on the Wuhan virus. Indeed, we believe that the yellow metal is supported by several structural, i.e., longer-term, dynamics. The ongoing trade conflict between the U.S. and China has pushed global economic policy uncertainty to levels not seen in 30 years.”
The report also cites global economic policy, the developing market’s move away from the dollar and declining bond yields as all being in favour of gold.