Gold to stabilise at $1,400 in 2020 then peak above $1,600 in 2021 - Macquarie

Gold to stabilise at $1,400 in 2020 then peak above $1,600 in 2021 - Macquarie

After rising to the highest level since 2013, gold prices are likely to retreat and stabilise around $1,400 an ounce next year before rallying again to $1,600 an ounce in 2021, according to one Australian bank.

In its latest report, Macquarie asked whether there is more upside in gold prices after investors across the globe upped their exposure to the yellow metal amid a flight to safety.

“Investors worldwide have already substantially boosted their exposure to the metal, net-length in CME futures and ETF holdings are oscillating around all-time highs recently – while the price has reported historic highs in almost all major producer and consumer currency-terms," wrote Macquarie's commodities strategists at the end of October.

Macquarie's analysis into gold's upside is very timely as prices tumbled to three-month lows on rising risk appetite amid positive U.S.-China trade headlines and rallying stock markets. December gold futures were last at $1,464.70, down 1.90% on the day.

One of the main concerns cited by the Australian bank was a correction to gold at such high levels.

"If global growth improves or if risk sentiment is lifted by a stabilisation of the geopolitical backdrop in the U.K., U.S. and Middle East, this could ultimately impact the price," the report said.

Going forward, Macquarie expects gold prices to stabilise around the $1,400 an ounce level in 2020.

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By Anna Golubova

For Kitco News