The Federal Reserve is expected to remain aggressive in cutting interest rates. How will this affect gold prices?
Here is their view, courtesy of eFXdata:
Citi Research discusses its new Gold forecast which puts the medium-term target at a record $2,000/oz.
“Citi Research upgrade their outlook for Gold – With Citi analysts now expecting Fed policy rates to hit the zero lower bound (ZLB), the team notes that their medium-term Gold price forecast targeting a record $2,000/oz had been pricing-in a ZLB scenario since 3Q’19,” Citi notes.
“Citi analysts also published their base case Gold price average for 2020 at $1,640/oz and $1,925/oz for 2021 (50% weight) and assigned a fat tail probability that prices will average $1,770 in 2H’20 (30% weight). The team is now biased to lift their near term base case forecasts closer to these higher levels given a more aggressive path for Fed cuts,” Citi adds.
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