Gold price could smash records at $2,000, says Citi

Precious metal has rallied after big purchases from central banks, including China’s

The price of gold could hit a record high of $2,000 an ounce within the next two years as US economic growth fades and the Federal Reserve cuts interest rates, according to analysts at Citigroup.

The New York-based bank said in a Monday research note that the precious metal could top levels last seen eight years ago, when gold surged to $1,900 an ounce, as uncertainty over the 2020 presidential election combines with a sputtering domestic economy.

Investors around the world have been drawn to gold at a time of negative bond yields, which have increased the appeal of yieldless assets such as gold. Around $15.3tn of bonds are trading at levels that guarantee buyers a loss, if the bonds are held to maturity. The gold price has risen by 17 per cent this year to trade at $1,495 a troy ounce, putting the precious metal on track for its best year since 2010.

Citi said a combination of lower rates, growing risks of a global downturn, and strong demand among central banks could push prices higher still. Central banks are buying more gold this year than any year in the past nine, according to the World Gold Council.

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Source: ft.com 10 September 2019