Citigroup analysts believe it is inevitable for the gold price to reach a new all-time high soon.
The analysts led by Ed Morse laid out three key factors that could catapult gold to a record high. They are relaxed financial conditions, rising inflows into exchange-traded funds (ETFs), and increasing exposure to the precious metal by investors.
Reason #1: Relaxed Financial Conditions And Low Yields
The Federal Reserve and the European Central Bank (ECB) are both seemingly focused on stimulating the American and European economies.
In doing so, the two central banks have established relaxed financial conditions, supplemented with low-interest rates.
Historically, gold has acted as a natural safe-haven asset against inflation. Investors typically consider the precious metal as a strong alternative investment when yields fall.
A confluence of low-interest rate, fear of inflation, and low yields could catalyze gold’s near-term performance.