At the beginning of European trading on Friday, spot gold continued to hover around $1840, with the 1850 mark above the key resistance.
In response to the trend of gold, the ANZ research team discussed the gold outlook for the coming year.
Gold prices have risen sharply this year as global economic uncertainty intensified due to the epidemic, prompting investors to turn to safe havens, the bank said. As the novel coronavirus vaccine launch is expected to boost the global economic outlook, some strategists expect the gold price rally to come to an end. But we hold different views. The likelihood of a strong global economic recovery and a rebound in risky assets continues to increase, which could undermine gold's safe-haven appeal. However, we don't think this will stop the current rise in gold prices.
ANZ said, "our gold valuation model shows that the price of gold should be around $2100 an ounce next year, assuming that US inflation rises to 1.7 per cent and the dollar index falls to 9010. The yield on 30-year bonds is stable at around 1.6 per cent."
Nevertheless, we also admit that there will be resistance in the short term. Continued strength in the stock market may lead investors to further move away from gold ETF, to equities (mainly traditional growth industries).
We then reduced our 0-3-month target to $1900 an ounce. However, we keep our 12-month target at $2100 an ounce.
