Citigroup increases Gold Price forecast
Citigroup revealed on Tuesday (October 13th) that it is lifting its medium-term Gold Price forecast in light of recent developments in the market, Reuters reports.
The yellow metal hit record highs again this week, prompting the world's largest bank by total customers to raise its six to 12-month estimate from $975 to $1,025 per ounce.
Explaining its decision, the group noted that the weakness of the dollar has been a major factor in the rise, while also suggesting that Gold Investment demand remains strong.
"Despite relatively weak fundamentals, we believe gold prices are being driven by a weakening US dollar, a structural increase in investor demand and diversification of US dollar reserves and portfolios," said Citigroup, according to the news provider.
Meanwhile, Daniel Sacks, co-portfolio manager of the Investec Global Gold Fund, claimed last week that there are three key reasons why investing in gold is a shrewd strategy.
He suggested that prices will rise further on the struggling greenback and inflation fears, while also noting that seasonal demand in India and the metal's safe-haven status are also attracting investors.
In an interview with the Daily Telegraph, he said: "The price of gold is still just over half of its prior peak in 'real' terms, even after the rally of the past eight years.
"The nominal peak price in 1980 at $850/oz adjusted to account for inflation equates to an equivalent price today of $1,884/oz."
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