Gold will surge above $1,600 an ounce as the Federal Reserve embarks on a quartet of interest rate cuts to combat slowing U.S. growth and the fallout from the trade war with China, according to BNP Paribas SA, which flagged prospects for a significant rise in prices in the coming months.
Gold will average $1,400 an ounce in 2019, up $60 from an earlier forecast, and $1,560 in 2020 following a rise of $130 in the outlook, BNP said in the note. The Fed’s easing cycle should push average prices above $1,600 in the first quarter of 2020, it said, adding: “We expect gold to rise significantly.”
Spot gold traded at $1,545.88 an ounce on Wednesday, up 20% this year. Prices hit $1,555.07 on Aug. 26, the highest level since 2013.