Standard Chartered Bank (Standard Chartered) believes that gold prices will hit a new high this year, but most of the gains will occur in the first half of the year.
Suki Cooper, a precious metals analyst at the bank, said he remained bullish on gold and expected gold to test the $2000 / oz mark again and hit a new high.
Standard Chartered expects gold prices to rise to 1930 in the first quarter and then to $2075 an ounce in the second quarter.
"investors will continue to allocate gold because the dollar will weaken, real interest rates will remain negative, loose monetary policy and further fiscal stimulus will continue, and expectations of rising inflation will come."
Cooper pointed out that the gold market faces a variety of macro drivers on the one hand and weak physical demand on the other.
One of the main reasons for the surge in gold prices last year was the large inflow of gold ETF.
Although there was a large outflow of gold ETF towards the end of last year, there have been a lot of inflows so far this year.
"when debt is high and the market is worried about inflation, investors will look for buying opportunities."
In addition, Cooper noted that demand from the US Mint in January was the highest since 2017.
On the other hand, the biggest risk facing the gold market this year is if there is a sudden unexpected tightening and the vaccine works quickly.
