An employee handles 1 kilogram of gold bullion at the YLG Bullion International headquarters in Bangkok, Thailand, on Friday, December 22, 2023.
Charigny Tiraspa | Bloomberg | Getty Images
Days after tensions in the Middle East escalated, gold prices continued to hover near record highs, increasing the appeal of the safe metal.
Gold prices hit a new record at Monday's close, with the most active June gold futures contract trading 0.37% higher at $2,383 an ounce, with some saying it has more room to rise.
„Gold's recent rally has been driven by geopolitical heat and coincided with record levels in equity indexes,“ Citi said in an April 15 note.
Demand for safe assets has increased as tensions in the Middle East rise following Iranian shelling 300 drones and missiles attack Israel directly — Most of it was intercepted, thanks to Israel iron dome air defense system.
Market participants are closely monitoring Possibility of retaliation The Jewish state has vowed to „impose a price“ on Iran.
Bartosz Sawicki, a market analyst at financial services firm Konotoxia Fintech, said significant retaliation could lead to an escalation of the conflict, which could trigger renewed gold purchases, and could even lead to higher oil prices. He said this could cause the dollar to rise.
We expect gold to reach $3,000 per ounce in the next $6 million to $18 million.
Gold price since the beginning of the year
Nevertheless, analysts remain bullish on the yellow metal's prospects due to physical demand and its appeal as a geopolitical hedge.
„We expect 6 million to 18 million gold at $3,000 an ounce,“ said Citi analysts led by Aakash Doshi, Citi's head of North American commodity research. The financial „price floor“ for gold also rose from about $1,000 to $2,000 an ounce, according to Citi.
On Friday, Goldman Sachs called the gold market „an unwavering bull market“ and revised its price target for the yellow metal upward from $2,300 to $2,700 an ounce by the end of the year.
—CNBC's Gina Francolla contributed to this report.