Gold futures hit a fresh record high on Monday, as experts from big banks predicted further increases motivated by growing demand and forecasts of central bank interest rate cuts—including by the U.S. Federal Reserve.
Rising their three-month gold price estimate to $2,800 per ounce, Citi (C, Financials) experts projected a six to twelve-month aim of $3,000. The bank credits consistent physical gold purchases predicted interest rate declines, and possible U.S. labor market downturn for this view. Given Middle Eastern geopolitical concerns, Citi also noted that gold would gain from increasing oil prices.
Analysts of Wells Fargo (WFC, Financials) share this optimistic view, stressing the main drivers of gold's great demand and restricted supply increase. Particularly in developing Asian nations, central banks have bought more gold recently; this trend is expected to continue, given worries about rising government debt levels in Western countries and slow economic development in China.
Based mostly on gold futures trading, investor interest in gold is still robust; open interest in precious metals rises 9% to slightly over $231 billion for the week ending October 18. The bank sees this momentum continuing, supported by possible geopolitical and inflation issues backing further gains.
