WisdomTree: Gold could rise to over US$1800/oz if geopolitical risks remain elevated
Nitesh Shah, Director – Research at WisdomTree shares his forecast on gold prises.
Shah: ‘We have never seen speculative positioning in the gold futures market remain as high as it is today (346k net long) for a long stretch of time. As such, for our base case forecast we bring positioning down to a more sober 120k contracts net long and see gold prices rising to US$1550/oz in Q2 2020. This forecast is based on US 10-year Treasury yields and the US dollar basket holding around current levels at 1.65% and 97 respectively.
However, should geopolitical concerns deteriorate further, speculative positioning could rise even more. If positioning were to rise to 400k contracts net long, our model indicates gold prices could rise to US$1875/oz – a whisker away from the all-time high gold price of US$1900/oz set on 5 September 2011.’