Gold prices continued to move in a positive zone and approached the record highs scaled last week above $2400 an ounce.
Prices are underpinned by mounting geopolitical tensions between Iran and Israel, driving demand on safe havens.
Gold closed on a fresh record high on Monday, while active June futures settled at $2383.
The City Bank group wrote a memo saying that gold’s recent surge is driven by geopolitical tensions, and coincides with record highs for the stock market as well.
Haven demand rallied after Iran launched over 300 drones and missiles directly towards Israel, with most intercepted mid-air.
Israel’s military officials asserted that Israel is preparing for a response to the attack launched by Tehran last week, while European and US officials called for restraint.
Analysts have warned that an Israeli response could lead to a wide-spread conflict, which will boost demand on gold prices and drive oil prices and the dollar higher.
$3000 an ounce
The City Bank group expects gold prices to hit $3000 in the next six to 18 months.
Gold is a favorite among investors in times of uncertainty and inflation, such as these times.
Gold spot prices hit a record high at $2431.55 an ounce on Friday, April 12.
Spot Prices
An usual phenomenon has now occurred, with US stock indices surging 15% this year at the same time that gold is hitting record highs as well.
Stocks are gaining ground amid high generosity from global central banks, which are starting to unwind their restrictive monetary policies.
Recent scorching US inflation data for March hurt the odds of a Federal Reserve interest rate cut in June or July, with investors now expecting only two interest rate cuts this year in the US, instead of three.
Higher interest rates mean higher treasury yields which usually sap demand from gold, however analysts remain optimistic on gold’s prospects for its haven status and strong actual demand.
Goldman Sachs’ Outlook
On Friday, Goldman Sachs’ analysts said that the gold market is an “unshakable bullish market”, revising their price target for the yellow metal from $2300 to $2700 by the end of the year.