Gold can hit $3,000/oz as investors become risk-averse: BofA Securities

Variables such as nominal gross domestic product (GDP), central bank balance sheets, or official gold reserves will remain the key determinants of gold prices.

Gold prices can shoot up to $3,000 per ounce (oz) – up a massive 78 per cent from the current level of around $1,689/oz – as investors become risk averse in the backdrop of coronavirus (Covid-19) pandemic that has already pushed central banks across the globe unveil stimulus measures to help stem the economic malaise triggered by this health scare.

“As central banks and governments double their balance sheets and fiscal deficits, respectively, we have also decided to up our 18-month gold target from $2,000 to $3,000/oz,” wrote Michael Jalonen and Lawson Winder of BofA Securities in a recent report.