Citi says gold prices may top $2,000 an ounce

New York (Apr 5)  Analysts at Citi say gold prices will “trade stronger for longer” and see them possibly topping $2,000 an ounce and posting new highs in the next year or two.

“We now expect spot gold prices to trade stronger for longer, possibly breaching $2,000/oz and posting new cyclical highs at some point in the next year or two,” the analysts said in a note published Tuesday.

“From a birds-eye view, low(er) for longer nominal and real interest rates, escalating global recession risks—exacerbated by U.S.-China trade tensions—heightened geopolitical rifts amid rich equity and credit market valuations, coupled with strong central bank and investor buying activity, are all combining to buttress a bullish gold market environment.”

Gold futures GC00, +0.18% on Tuesday fell $9.20 to $1,501.90 an ounce. But futures have climbed about 23% over the last 12 months.

The Citi analysts also noted platinum PL00, +0.90% has rallied over the past two weeks, playing catch up with gold.

“While consolidation is likely in the near term, we remain bullish platinum over the next 12 months, owing to our expectations of an improvement in automotive demand,” they added.

MarketWatch