Credit Suisse Bank has added its voice to other prominent institutions backing gold for 2020 in its latest outlook report, released earlier this week. Analysts at the bank said Wednesday that they expect to see the precious metal “perform very well” in 2020, making it a solid pick for investors.
The bank suggests that gold prices will average higher an ounce this year, it says we may see a lot of upward movement in the first quarter, with its expectations being that gold will peak close to $1,600 by the end of March. Overall, it expects to see gold close the year out very high.
Credit Suisse analysts noted that what have become the normal areas of concern, namely Brexit, trade wars and the shadow of a global economic slowdown support gold prices and make a case for investment, with hints that any current optimism felt by the stock market will begin to wane as the year goes on.
The bank says, “This uncertainty is leading to most central banks around the world cutting rates, which is supportive of gold prices (lower yields lead to higher gold). In the U.S., the Fed has indicated a pause in rate cuts, but this stance could change quickly, as we saw last year, if economic fundamentals weaken.
“Currently over ~US$10 trillion worth of bonds globally are negative-yielding. Low/negative yields also support gold prices as the opportunity cost for holding bonds diminishes and gold screens as a more attractive safe-haven asset.
“Central banks have been net buyers of gold for 10 consecutive years, and Asian central banks still have very low gold holdings, which could mean countries like China continue to switch Treasury holdings into gold.”
This outlook makes a strong case for 2020 to be the year of gold investment and with a positive forecast for the future, Credit Suisse offers a compelling argument to buy now.