Citing the current persistent environment of low or negative interest rates around the world, some analysts believe the metal can reach as high as $8,000.
Barry Dawes, executive
chairman at Martin Place Securities, sees $3,500 as a target that's reachable in the next two years. Although
it might seem lofty, such a climb would not be unprecedented, and Dawes is far
from the only issuer of this forecast. Over the past two years, gold has
already demonstrated the ability to appreciate by nearly 50%. There is also no
shortage of figures in finance who are expecting such movements, with Quadriga
Igneo fund manager Diego Parrilla listing $5,000 as a possible level over the
next three to five years.
To Dawes, the most
impressive part about gold's performance was the ease with which the metal
cleared both $1,800 and its previous all-time record, as some had thought the
metal might encounter resistance around both levels.
Goldman Sachs, whose analysts have
consistently upgraded their gold forecast over the previous months, now sees
gold reaching$2,300 over the next 12 months. Previously, they had pegged $2,000 as the
level to reach within that timeframe. Goldman cited the persistent environment
of low or negative interest rates around the world as a primary reason for
their bullish view. Besides this, concerns over the economic recovery moving
forward, worries over the dollar's status and a flare-up between the U.S. and
China have all acted as powerful tailwinds. The events over the last couple of
months seem to have aggravated existing issues between the two nations, with
each of them shutting down the other's consulate in a clear display of
rapidly-worsening relations.
Juerg Kiener, managing director of Swiss Asia
Capital, has a similarly bullish forecast for gold's price based on the
technical picture. In a recent interview with CNBC, Kiener delved into the
technicals and explained that gold's current price movement looks to be
signaling $2,834 in the near future, stating that his long-term expectations
are even higher. Kiener also noted that gold has historically bounced back
seven to eight times higher from its bottom. In Kiener's example of a $1,050
bottom, gold would eventually go on towards $8,000. Interestingly enough, many
pundits have stated that gold had reached a bottom of $1,200 in 2018.