Alexander Trigaux, Editor, GoldSilver
DEC 10, 2018
It’s time for our roundup of the big investment banks and where they predict the gold price will go in 2019. Their forecasts, while as fallible as any others, are worth paying attention to for one reason.
These banks control enormous amounts of capital, so keeping an eye on where they stand vis a vis the gold price is worth monitoring.
So, presented here without further commentary, is a sampling of current institutional views on gold:
Goldman Sachs calls late-2018 gold prices ‘extremely attractive.’ "If U.S. growth slows down next year, as expected, gold would benefit from higher demand for defensive assets," Goldman said. Their most recent 2019 price target was $1,325/oz.
“We see gold likely repricing lower through the middle of next year, at which point the Fed’s policy will move into restrictive territory. The curve will invert, the expansion will slow and expectations of Fed easing will build. At this juncture, we would expect real rates to move lower and gold’s fortunes to reverse, as gold tends to benefit from consistent drop in real yields during the lead up to recessions and thereafter.” 2019 gold price forecast: $1,294/oz.
“The USD has on average depreciated in the latter third of past expansions but there is a lot of variation across cycles, so this is far from certain. In contrast, commodities and especially gold have tended to appreciate consistently.” 2019 gold price forecast: $1,250
“Gold is set to surge over the next year as concerns deepen about the widening U.S. budget deficit and a tariff-driven trade war starts to damage the country’s economy, according to Bank of America Merrill Lynch. Bullion could average $1,350 an ounce in 2019 as corporate tax reforms worsen the U.S. fiscal balance, Francisco Blanch, head of global commodities and derivatives research, said.”
“We think the risk reward for entering precious metals positions is quite attractive. If our base scenario plays out, it is likely that precious metal prices will rise this year and next on the back of a cut back in speculative short positions. 2019 price target: $1,400.
HSBC expects gold to average $1,292/oz in 2019.
"With this aging equities rally globally, if we do get some financial market uncertainty, I think gold's likely avenue for a rally will be through a rise in volatility," senior HSBC precious metals analyst Jim Steel said.
“According to the COT report, hedge funds and managers keep betting on weak gold despite its recent rise. However, Commerzbank’s analysts see this as a positive signal. As the large speculators hold net-short positions for a long time, the reversal moment should happen soon. The bank predicts that as soon as the market gets a fresh catalyst, traders will close positions and the price will go up.
As a result, the bank forecasts a gold’s rise to $1,500 in 2019.”
Scotiabank’s forecast tables show a bullish 2019 forecast price of $1,300/oz.
“The precious metal will start to rebound in the final quarter of this year to average $1,375 an ounce in the last three months of next year and could touch a high of $1,400, said Bart Melek, global head of commodity strategy at TD Securities in Toronto. That’s a level last seen in 2013.