03.07.202011:39 Forex Analysis & Reviews: Can gold rise to $3,000?

The popularity of the yellow metal, gold, has become especially noticeable after COVID-19 is gradually fading. Previously, investors massively "ran away" to this asset, considering it the most reliable during the crisis. As a result, the price of gold rose, giving rise to further positive forecasts.

Experts of Bank of America shared one of these assumptions related to the active growth in the price of precious metals. Bank experts were optimistic about gold back in April 2020, in the midst of a pandemic. They believe that neither $ 2,000 nor $ 3,000 per ounce is an obstacle for the yellow metal. According to some analysts, coronavirus infection serves as an impulse for precious metals, increasing its attractiveness to investors and helping it to rise.

Last week, at the end of June, against the backdrop of a new outbreak of COVID-19, the yellow metal came close to a nine-year high. Market fears about the next wave of coronavirus triggered an explosion in demand for protective assets, the key of which is gold. The price of the main precious metal almost approached $1800, but could not reach the desired level. However, the market does not lose hope for a repeat of the storm, counting on overcoming not only this peak, but also reaching $1,900 per 1 ounce.

Currently, gold runs near the levels of $ 1774.80– $ 1774.90. On Friday, July 3, gold rose to $ 1,775.50– $ 1,775.60 per ounce, confirming analysts' forecasts of a possible increase. According to experts of Bank of America, in the next 18 months, the cost of precious metals can skyrocket to $ 3,000. In the bank's previous forecast, it was supposed to increase to $2000 per 1 ounce. This coincides with the forecasts of other experts, foreshadowing the rise in the price of precious metals to $ 2000 per 1 ounce by the end of 2020. The main reason for this increase is the current crisis caused by the COVID-19 pandemic, deeper and wider than the previous financial failure of 2008.

One of the key impulses of growth in the price of precious metals is the soft monetary policy of leading central banks that flooded the market with money. The inclusion of the "printing press" led to the fact that part of this capital went to the gold market, supporting the defensive asset. Another catalyst for the growth of the yellow metal was the total weakening of the American currency, declining across the entire spectrum of the market.

Analysts conclude that the cost of gold from $ 2,000 to $ 3,000 per ounce is quite achievable. According to preliminary estimates, the precious metal will reach $ 2,000 per ounce by the end of this year, and they will give $ 3,000 in the medium-term. Experts also concluded that the growing popularity of yellow metal will allow it to maintain a high price range for a long time.