(Kitco News) Gold prices will remain supported throughout next year because of uncertainty surrounding trade and global growth, said ING in its 2020 Commodities Outlook.
The Dutch bank’s price forecast has gold trading well above its new floor of $1,450 an ounce throughout 2020 but does not see it rise much above $1,500 an ounce.
“Looking to 2020 … uncertainty around trade talks and global growth are likely to remain key drivers,” ING head of commodities strategy Warren Patterson and senior commodities strategist Wenyu Yao said in the report.
In Q1, the bank has gold averaging at $1,500 an ounce, then dropping to $1,470 in Q2 and Q3, and finally rising to $1,480 in Q4.
“We currently forecast that gold prices will average around US$1,475/oz over the course of 2020,” ING’s report stated.
Gold’s further upside potential will depend on how dovish the Federal Reserve chooses to be next year, the strategists added.
“As a result of trade uncertainty and concerns over global growth, we do see upside to gold prices from current levels. While if the U.S. Fed turns increasingly more dovish, this only provides further upside,” they said.
The 2020 outlook is based on the yellow metal’s solid performance this year, which saw prices rise 21% at one point, the report said.
“This strength shouldn’t come as too much of a surprise, given the growing uncertainty in the global economy, with slowing growth and escalating trade tensions. These factors have increased the appeal for safe-haven assets such as gold. Furthermore, more dovish policy from central banks has also provided support to gold,” the strategists said.