Fitch Solutions Country Risk and Industry Research, a unit of Fitch Group, has revised its 2020 gold price forecast upwards to an average of $1 680/oz from $1 450/oz previously, as risk-off sentiment among investors is expected to persist in the coming months, boosting demand for safe haven assets such as gold.
Fitch expects that, in the short term, uncertainty surrounding the full economic impact of Covid-19, low bond yields and monetary easing will support gold prices given its safe haven status.
In the long term, it expects stabilisation from competing economic factors, such as late cycle pressures buoying prices, while easing geopolitical uncertainty caps price growth, leading to a gold price average of $1 650/oz during 2021 to 2024.
The balance of risk to Fitch’s forecast is tilted to the upside for gold prices.
The unit says that, going forward, if there is a clear deterioration of the Covid-19 situation outside China and global economic data in the coming months fare much worse than its expectation, stronger flow into safe haven assets could see gold prices appreciate greater than its core views.