US election risk may push gold to record high before the year-end – Citigroup

Omkar Godbole FXStreet Contributor

Gold could hit a record high above $2,075 before the end of 2020 on the back of uncertainty surrounding the US elections, analysts at Citigroup Inc. warned on Wednesday, according to Bloomberg.

Key points

The precious metals market is underpricing prospects of the US election outcome delay.

The bank’s forecast implies a surge of more than $200 for bullion futures from Wednesday's price of $1,900.

The election “could be an extraordinary catalyst for gold flat price and volatility skew late in the fourth quarter, even though historically there is no clear pattern for gold trading or price volatility into and after the US elections.

The yellow metal rallied from $1,450 to $2,075 in 4-1/2 months to Aug. 7, as unprecedented liquidity injections by major central banks coupled with fears of prolonged coronavirus-led economic downturn strengthened the demand for scarce safe-haven assets.

At press time, gold is trading near $1,860 per ounce.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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