The Australian bank Westpac has upgraded its forecast for gold for the next three years, with a rise of almost $140 expected by the end of the year due to the continuing global impact of coronavirus.

The bank’s senior economist, Justin Smirk says that the status of gold has only elevated during the crisis, explaining “As February ended the focus for the COVID-19 outbreak shifted from China to the rest of the world. In particular, markets shifted attention to the rapidly expanding outbreak in Italy and the early stages of an outbreak forming in the U.S., and the disruptions this would bring to the European and U.S. economies. Oil is the key commodity at risk as industrialized economies bunker down while base metals, iron ore & coal remain supported by supply factors and a better demand outlook. Gold stands out in a high-risk environment and we have lifted the year-end target to $1,600/oz from $1,461/oz.”

The revisions to the gold forecast mean that Westpac now expects to see gold trading at $1,687 from as early as next month, with prices then set to stay above $1600 in 2021 to reach $1700 by the end of 2022.

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