Gold Prices Take a Breather Amid Geopolitical Tensions
Gold Price Movement
Gold prices have paused after a recent surge to record highs, driven by escalating geopolitical tensions and safe-haven demand. Citi analysts foresee the potential for gold to reach $3,000 per ounce.
Current Market Status
At 10:05 ET (14:05 GMT), gold was trading 0.5% lower at $2,370.27 per ounce, staying near the previous high of $2,431.53 per ounce set on Friday.
Geopolitical Factors
The recent spike in gold prices was primarily due to heightened tensions in the Middle East following an attack by Iran on Israel over the weekend. Concerns of a broader conflict involving other regional powers and global allies have bolstered demand for gold as a safe-haven asset.
Supporting Factors
In addition to geopolitical tensions, gold prices have been supported by central bank purchases, particularly in emerging markets, amid fears of a looming global economic downturn in 2024.
Citi’s Analysis
Citi analysts note that gold prices have detached from traditional indicators such as US rates and the dollar, highlighting strong physical demand from countries like India and China, geopolitical risk hedging, and central bank buying as key drivers of the market.
Price Forecasts
Citi has raised its baseline gold price projections, anticipating a further increase to $3,000 per ounce in the next 6-18 months. The bank expects gold to test and surpass $2,500 per ounce in the second half of 2024.
Gold continues to attract investors seeking a safe haven in uncertain times, with geopolitical tensions and economic concerns shaping its upward trajectory.
