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Analysts at Canadian bank CIBC have confirmed their long term confidence in gold, reiterating that they foresee the precious metal moving up to record levels of around £1,438 ($2,000). In a briefing note, the bank confirmed its belief that gold has a substantial long term potential and multiple price drivers saying,

“We expect demand for physical gold … will remain elevated, not only from traditional investors but also from a wider array of investors seeking a safe-haven option to hedge against market volatility.

“While inflation will undoubtedly provide a boost to gold, in our view, real rates will continue to be the bigger driver for outperformance over the coming year. History shows that gold doesn’t seem to care and, in fact, can keep outperforming until real rates post a significant recovery. That recovery still seems very far off at this stage.

“Given our expectations for inflation to increase over the coming months and for pressure on the Fed to walk a fine line between hiking rates to manage inflation vs. supporting economic growth, we continue to believe that gold … prices will continue to climb over the coming quarters.”

The bank says that it expects fiscal stimulus measures to remain in place, given the need for a cautious approach back towards economic recovery and the huge amounts of liquidity being pumped into the market. It expects to see gold trading at an average of £1,510 ($2,100) by 2022.

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