Gold prices settle at 1-week high as BofA forecasts the metal will surge to $3,000

Gold futures settled at their highest in a week on Wednesday, as nagging concerns about the global economy helped support a rise in the precious metal, a day after prices settled at their lowest in nearly two weeks.

Gold was back in fashion Wednesday as early “dollar weakness and lingering concerns over the global economy supported the flight to safety,” said Lukman Otunuga, senior research analyst at FXTM.

“The precious metal is likely to remain supported by oil market mayhem among many other concerning themes and could extend gains as investors adopt a guarded approach towards riskier assets,” he told MarketWatch.

Gold for June delivery US:GCM20 on Comex rose $50.50, or 3%, to settle at $1,738.30 an ounce, the highest most-active contract finish since April 15, according to FactSet data. Prices lost 1.4% on Tuesday to mark the lowest close since April 8/

Gold prices were buoyed by safe-haven demand amid speculation that “some Asian investors and financial markets have been badly hurt by the collapse in crude oil prices this week,” said Jim Wyckoff, senior analyst at, in a daily note.

“Speculation in the marketplace at present is that Asian investors have been hit the hardest” by the drop in the now-expired May West Texas Intermediate crude futures contract to negative prices on Monday, said Wyckoff, stressing that the talk is a rumor circulating in the market.

Analysts at Bank of America were upbeat on the outlook for gold prices, raising their 18-month price target to $3,000 an ounce from $2,000, or more than 50% above a nine-year old record at around $1,921, citing the prospects of endless monetary expansion from central banks, including the Federal Reserve, to limit the economic damage from the COVID-19 pandemic.

Based on records going back to November 1984, the record intraday level for most-active gold futures stands at $1,923.70 an ounce on Sept. 6, 2011, with the settlement record at $1,891.90 from August 22, 2011, according to Dow Jones Market Data.

“The rather lofty upside gold price forecast from Bank of America continues to echo in the marketplace with the widely publicized quote ‘the Fed can’t print gold’ a very strong point for the bull camp,” analysts at Zaner Metals wrote in a daily update.

“It is also possible that gold and many commodities are catching a lift from news that the latest U.S. stimulus package has cleared the Senate and is very likely to be signed into law before the end of this week,” they said.

Some weakness early Wednesday in the dollar, against a basket of a half-dozen currencies, as gauged by the ICE U.S. Dollar index US:DXY had also helped to support an advance for precious metals. A softer greenback can make commodities priced in the currency more attractive for buyers using other monetary units. As gold futures settled, however, the dollar index was up 0.2% at 100.46 after a low at 99.897.

May silver US:SIK20, meanwhile, picked up 45.9 cents, or 3.1%, at $15.335 an ounce, following a 4.7% slide on Tuesday.

Among other metals, May copper US:HGK20 added 6.1 cents, or 2.7%, to trade at $2.29 a pound. July platinum US:PLN20 advanced 0.9%, to reach $765.30 an ounce, but June palladium US:PAM20 fell 0.8% to $1,892.20 an ounce.


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