CNBC: Citi Sees Gold Topping $2,000 in Next 12 to 24 Months

February 19, 2020

Article by Pippa Stevens in CNBC financial

As the record bull market stretches on, and as the coronavirus outbreak incites fears of a potential slowdown in global growth, gold could be a way for investors to hedge risks to the downside, Citi said Wednesday.

The firm believes market jitters will prompt investors to pile into the so-called safe haven asset, pushing gold prices to $2,000 per ounce in the next 12 to 24 months.

“Gold should perform as a convex macro asset market hedge, resilient during ongoing risk market rallies but a better hedge during sell-offs and vol spikes,” the analysts led by Ed Morse said.

Morse said that the bullish activity in gold this year indicates growing investor concern over where we are in the business cycle, as well as ongoing uncertainties surrounding the U.S.-China trade war and the upcoming U.S. election.

"Gold is a direct beneficiary of the low nominal and negative real yield environment,” Morse said, while adding that gold can also “outperform on a risk market unwind should coronavirus risks impact supply chains and thus US earnings momentum.”

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