Gold will end the year higher, spurred by faster inflation and political tensions in Russia, Syria and North Korea, according to Intesa Sanpaolo, the best forecaster for the metal last quarter.
Prices could take a v-shaped path this year, with a swoon coming mid-year as the Federal Reserve raises US interest rates, said Daniela Corsini, an analyst at the bank. Gold will likely bounce back by year-end, reaching a high of $1 350 an ounce in the fourth quarter, she predicted.
That would leave bullion at the highest level since September. Prices have risen 12% this year, supported by inflation concerns and a mix of geopolitical worries, including North Korea’s nuclear ambitions and U.S. airstrikes in Syria and Afghanistan.
“Markets will surely remain nervous about this uncertainty,” she said by phone from Milan on Tuesday. “And if economic data in the US remains strong, then gold will regain its role as an inflation hedge.”
Bullion for immediate delivery dropped 0.3% to $1 286.54 an ounce at 12:22pm in Singapore, according to Bloomberg generic pricing.
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