We’ve been talking a lot about gold lately.
And that’s because it finally soared above $3,000 and could be headed to $3,500 next.
Analysts at UBS just raised its gold price forecast to $3,200, citing a potential prolonged global trade conflict as a key catalyst. Analysts at Macquarie say gold could rally to $3,500 by the third quarter of this year thanks to its safe-haven status and concerns about the U.S. budget deficit.
“We do still think there are some materially bullish developments likely to come for gold,” said Marcus Garvey, Macquarie’s head of commodities strategy, who raised the bank’s top-end price target from $3,000 to $3,500 last week, as noted by Bloomberg. “I don’t really see things that would suggest to us that this rally is in an area that’s become frenzied or overextended.”
Central bank buying is another key catalyst, with China expanding its gold reserves again in February. It now holds about 73.61 million ounces of gold.
And, according to the World Gold Council, global central banks picked up 18 tons of gold just in January. “Goldman Sachs — which raised its year-end forecast to $3,100 just last month — now sees a growing likelihood of an even bigger rally, driven by strong central bank buying and rising investor demand,” added Bloomberg.
While we can always trade the gold related ETFs we’ve mentioned before, there’s also big opportunity in gold stocks.
Look at Barrick Gold (SYM: GOLD).
After running from about $15 to a high of $19.74, it pulled back slightly to $19. From here, we’d like to see GOLD rally back to $21. Fueling momentum, analysts at UBS upgraded the mining stock to a buy rating with a $22 price target.
There’s also Eldorado Gold (SYM: EGO).
After rallying from $13.30 to a high of $16.70, we’d like to see it rally back to $19 initially. Helping, analysts at National Bank just raised their price target on EGO to C$29 from C$25 with an outperform rating.
Continue Reading: Have You Heard of the Golden Anomaly?
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Written by Ian Cooper