Bank of America's note on gold
Gold is down $12 today to $1683 but there has been some persistent buying in the past hour as it recovers from a low of $1659.
One note that's getting attention is from Bank of America, who raised its 18-month target on gold to $3000 from $2000. That would be nearly double from current levels.
"Our CTA models suggest gold positioning is light, likely because of the spike in volatility and the mechanical drop in the gold Sharpe ratio. But this constraint could change as volatiltiy keeps falling quickly across financial markets," they write.
Their baseline is that a lot of the risks for central bank moves will be socialized and that fiat currencies could come under pressure. They see an average prices of $1695 this year and $2063 in 2021.
On the downside they warn that slower jewelry demand from China and India could be a headwind for gold but that "financial repression is back on an extraordinary scale."
Here's the note:
