Gold may rally to as high as $1,400 an ounce should risk aversion intensify, according to the top-ranked precious metals forecaster, who dubbed bullion a “superhero” when raising his outlook for 2016.
The metal may remain above $1,200 this quarter and possibly into next as investors seek a haven, Oversea-Chinese Banking Corp. economist Barnabas Gan said in an e-mail to Bloomberg. Singapore-based Gan, who previously saw prices dropping to $950 at the end of the year, revised his outlook in a Feb. 19 report, and now sees a range of $1,000 to $1,150 by the end of 2016.
The precious metal is the best performer among commodities this year as concern about a slowing global growth and slumping oil prices spurred financial-market turmoil and increased speculation that the Federal Reserve will hold off on raising U.S. borrowing costs.
As investors piled into bullion-backed funds and producers’ shares jumped, forecasters including Gan have been prompted to rework their outlook for 2016.
“Gold is performing largely as a safe-haven asset given the equity doldrums and overall risk aversion,” Gan said in response to e-mailed questions, laying out his case for changing his forecasts. “Should risk aversion dominate amid intensified global growth headwinds, gold may well rally to as high as $1,400.”
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