The 3 primary drivers of the higher gold price
A snippet from a note via Citi on the primary driver for the higher gold price:
- The record pace of ETF investor inflows
- a weakening USD
- negative real yields
None of these should be surprising if you've following along, but nevertheless a useful 'in a nutshell' outline from Citi.
Targets from the bank:
- short-term targets to ~$2,100/oz
- 6-12m targets breaching $2,300/oz seems plausible
Be wary of these factors:
- The contraction in global jewelry demand for 2020 persists and still appears worse than the GFC. This may put downside risks on gold.
- Russia (CBR) has paused fresh purchases as of April.
- The PBoC has not increased gold holdings since last September/October, either.
- Total net buying of EM CBs should slow dramatically in 2020.
Reprinted from forexlive, the copyright all reserved by the original author.
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