Gold surged to a record high of $1,984.66 per ounce yesterday due to fear over the world economy dealing with rising coronavirus cases. It then slipped lower to $1,970.69 per ounce as the US dollar triggered some profit-taking.
Main investment banking company Goldman Sachs predicts the price of gold to rise 20% to touch $2,300 before the end of 2021.
Goldman believes the price of gold will surge to $2,300 in the next 12 months — a revised forecast that predicted $2,000 — due to concerns over the US dollar’s weakness.
In the short term, a move to $2,000 is likely, according to an independent analyst, with a host of factors including weaker economic data and a resurgence in the geopolitical spat between the United States and China contriving to take gold higher.
Analysts at Goldman Sachs stated that a “record level of debt accumulation” from the U.S. government and “real concerns around the longevity of the US dollar as a reserve currency” had affected the price of the commodity.
The gold price has surged roughly 30% so far this year, supported mainly by lower interest rates and widespread stimulus measures by global central banks to ease the economic blow from the pandemic.
Spot gold may settle into a range between $1,943 and $1,954 per ounce as it failed again to break resistance at $1,982, said Reuters technical analyst Wang Tao.