Gold's safe-haven demand could see it hit $1,800 an ounce, as investors rush towards precious metals on rising fears of a coronavirus pandemic.
The metal has outperformed traditional haven currencies including the Japanese yen and Swiss franc as "the haven of last resort," Goldman analyst Mikhail Sprogis said in a note. The bullion is trading near a seven-year high, supported by an increasing number of coronavirus cases worldwide that threaten to curtail global economic activity.
Goldman Sachs has raised its price forecast for gold, saying that "in the event that the virus effect spreads to Q2, we could see gold top $1800/oz already on a 3-month basis." The investment bank also raised its silver forecast.
In the event that the virus effect spreads to Q2, we could see gold top $1800/oz already on a 3-month basis"
"We see such a rally being driven by the continued search for yield, increased demand for portfolio diversification and higher political uncertainty" with gold being "a strategic allocation to protect a portfolio from geopolitical risks such as the current outbreak, de-dollarization and negative real yields," Goldman added.