Gold Lacks a Catalyst to Drive Prices Higher: BoAML

SEATTLE (Scrap Monster): The latest gold outlook report published by the Bank of America Merrill Lynch (BoAML) maintains a neutral view on gold prices next year. The yellow metal lacks a catalyst to drive its prices higher in 2020, said the report.

According to the bank, the gold prices are likely to average at $1,494 per ounce in 2020. This is just around 1% higher than the current price levels of gold. The investment interest in gold is expected to remain lukewarm, on account of several factors including U.S. economic growth and inflation.

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Michael Widmer, precious metals strategist at BoAML noted that there seems to be no opportunity to get excited about gold next year. Renewed dovishness in central banks could push gold prices marginally higher. However, gold is unlikely to make a major headway, he added.

BoAML foresees 1.7% expansion to U.S. economy, driven by potential end to the trade war between the U.S. and China. The inflation pressures are expected to be around 2%. The 10-year bonds are likely to hold steady around 2%. The bank sees a very low chance for the U.S. falling into a recession. In general, the improving economic conditions will be negative for gold.