Bank of America: Gold Price to Surge Past $3,000 Per Ounce

SEATTLE (Scrap Monster): The economists at the Bank of America foresee huge surge in gold prices. In its latest report, the bank has significantly raised its 18-month price target for the yellow metal.

The bank reaffirmed its bullish outlook on gold. It had earlier said that gold’s prices are likely to touch new all-time high this year. In the new report published Tuesday, it has raised the 18-month target of gold to $3,000 per ounce, which is almost 50% increase from its earlier forecast. Also, the bank predicted the yellow metal prices to average at nearly $2,063 per ounce in 2021. The bullion is expected to average at $1,695 per ounce over the course of 2020.

The fiat currencies could come under pressure on account of sharp contraction in economic output, surging fiscal outlays and escalating central bank balance sheets. This in turn would result in investors turning towards gold, the report said.

Further rallies in gold prices could be halted by reduced demand for jewellery in India and China. However, heightened financial repression is expected to outclass concerns over traditional gold supply and demand fundamentals.

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At the same time, the physical gold demand is expected to remain muted this year. Also, central bank gold purchases are likely to slow down, Bank of America said.