Gold is shining ‘bright like a diamond’ and will hit $3,000 says Citi

Gold costs continued to hover close to file highs days after Center East tensions flared, boosting the safe-haven enchantment of bullion.

Gold costs notched one other file shut Monday, with the most-active June contract for gold futures buying and selling 0.37% larger to settle at $2,383 per ounce, and a few say there’s extra room to run.

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

Demand for the safe-haven asset grew amid escalating tensions within the Center East after Iran fired over 300 drones and missiles directly at Israel — most of which have been intercepted, due to Israel’s Iron Dome air defense system.

Market watchers are intently monitoring a potential retaliation by the Jewish state, which has vowed to “exact a price” from Iran.

A major retaliation might result in a wider battle, which might consequently set off renewed shopping for of gold, in addition to a rally in oil costs and strengthening of the U.S. greenback, stated Bartosz Sawicki, market analyst at monetary companies agency Conotoxia fintech.

Regardless of that, analysts stay bullish on the yellow metallic’s outlook, boosted by continued bodily demand in addition to its enchantment as a geopolitical hedge. 

“We project $3,000/oz gold over the next 6-18m,” stated Citi’s analysts led by Aakash Doshi, Citi’s North America head of commodities analysis. The monetary gold “price floor” has additionally moved larger from round $1,000 to $2,000 per ounce, Citi stated.

On Friday, Goldman Sachs referred to the gold market as an “unshakeable bull market” and revised upward its worth goal for the yellow metallic from $2,300 per ounce to $2,700 by the tip of the yr.

— CNBC’s Gina Francolla contributed to this report.