22.06.202013:25 Forex Analysis & Reviews: Gold to reach $ 2,000

Demand for gold returned, after the need for reliable safe haven assets has increased once again. Forecasts for the precious metal are at unprecedented heights, most of which are rational, taking into account the upward trends in the market.

Last Friday, June 19, gold rose by almost 1.5% and by the end of the day added 0.6%, closing at $ 1,734 per 1 ounce. It gave about $ 1,756 on exchanges with precious metals, and on Monday, June 22, is being traded near $ 1,758 - $ 1,759 per ounce. Experts believe that the dynamics of gold for the coming months will be determined this week.

Leading experts in the precious metals market expect gold to have long price increases, which can alternate with downward turns. Nevertheless, a return to growth is guaranteed, says Everett Millman, an expert at Gainesville Coins. Millman predicts gold to increase to $ 1,750 per 1 ounce, which will become a key resistance level to exit the current range. The forecast for precious metals for the coming days is neutral, pointing to the level of $ 1,700 as reliable support. Charles Nedoss, chief market strategist at LaSalle Futures Group, opposes this, claiming that gold will rise this week above $ 1,760 and consolidate in this range.

The most optimistic scenario for gold was offered by the Goldman Sachs, which is confident that gold will easily reach $ 2,000 per ounce in case inflation in the United States grows to 2% or more. This is facilitated by the current policy of the Federal Reserve, which strives for this indicator and intends to keep interest rates at a record low. The Goldman Sachs also improved its forecast for gold for the next three to six months to up to $ 1800 and $ 1900 per 1 ounce, respectively.

The main driving force for gold, according to several experts, including Gainesville Coins analysts, is the tense relations between the United States and China. Additional factors are the political crisis in the US, as well as the impending second wave of coronavirus pandemic. At the moment, investors are actively buying gold due to the concerns about new outbreaks of the infection.

Gold is also set to rise if the dollar continues to weaken. According to experts, a decline in the currency will activate a rise in demand for the precious metal, which may lead to an increase in the quotes to the round level of $ 2,000 per 1 ounce. At the moment, gold is supported by the large-scale growth rate of money supply coming out from world central banks.

Analysts also believe that in the short and medium term, the upward trend in gold will not only continue but also strengthen, as three factors will support the precious metal: weak data on the US and the EU economies, high probability of a second wave of COVID-19, and escalation of geopolitical tensions. These drivers will help gold reach a value up to $ 2000 for 1 ounce or even higher.