Gold: Short-term breather likely
Our central scenario is that fundamental drivers such as US long-term real rates and the US dollar should prove less supportive of gold in the short term.
These factors, coupled with a stretched short-term gold price, suggests the potential for a short-term correction is high.
Over the longer term, the large increase in global public debts and massive injections of liquidity from central banks favour a higher allocation to gold among global money managers because of its track record as a store of value and its resilience to any rise in inflation.
Consequently, our three-month forecast now stands to USD1,920 per troy ounce, while our 12-month forecast has been revised higher to USD2,250 per troy ounce.