Gold is shining ‘bright like a diamond’ and might strike $3,000 states Citi

Gold rates continued to hover near record highs days after Middle East stress flared, increasing the safe-haven appeal of bullion.

Gold rates notched another record close Monday, with the most-active June agreement for gold futures trading 0.37% greater to settle at $2,383 per ounce, and some state there’s more space to run.

“The recent gold rally has been aided by geopolitical heat and is coinciding with record equity index levels,” Citi composed in a note dated April 15.

Demand for the safe-haven property grew amidst intensifying stress in the Middle East after Iran fired over 300 drones and rockets straight at Israel– the majority of which were obstructed, thanks to Israel’s Iron Dome air defense system.

Market watchers are carefully keeping an eye on a prospective retaliation by the Jewish state, which has actually pledged to “exact a price” from Iran.

A considerable retaliation might result in a larger dispute, which would subsequently activate restored purchasing of gold, in addition to a rally in oil rates and conditioning of the U.S. dollar, stated Bartosz Sawicki, market expert at monetary services company Conotoxia fintech.

In spite of that, experts stay bullish on the yellow metal’s outlook, increased by continued physical need in addition to its appeal as a geopolitical hedge.

“We project $3,000/oz gold over the next 6-18m,” stated Citi’s experts led by Aakash Doshi, Citi’s North America head of products research study. The monetary gold “price floor” has actually likewise moved higher from around $1,000 to $2,000 per ounce, Citi stated.

On Friday, Goldman Sachs described the gold market as an “unshakeable bull market” and modified up its rate target for the yellow metal from $2,300 per ounce to $2,700 by the end of the year.

— CNBC’s Gina Francolla added to this report.