Bank of America Corp. raised its 18-month gold-price target to US$3,000 an ounce — more than 50 per cent above the existing price record — in a report titled “The Fed can’t print gold.”
The bank increased its target from US$2,000 previously, as policy makers across the globe unleash vast amounts of fiscal and monetary stimulus to help shore up economies hurt by the coronavirus.
“As economic output contracts sharply, fiscal outlays surge, and central bank balance sheets double, fiat currencies could come under pressure,” analysts including Michael Widmer and Francisco Blanch said in the report. “Investors will aim for gold.”
BofA expects bullion to average US$1,695 an ounce this year and US$2,063 in 2021. The record of US$1,921.17 was set in September 2011. Spot prices traded around US$1,678 on Tuesday and are up 11 per cent this year.