Citigroup lifts gold forecast, says rising inflation is "very positive" for commodities

Author: Justin Low | Category: News

From an email note by analysts which includes Heath Jansen

The note shows that they have boosted forecasts for some raw materials, pointing towards strength in the global economy, a weaker US dollar, and rising inflation among factors supporting higher commodity prices.

They raised their 2018 gold forecast by 7% to $1,355/oz; while noting that their 6-12 months price target is $1,385, with risks skewed to the upside.

"Higher inflation, solid hedging demand, softer dollar, and improving consumption in China provide a supportive environment for prices", the note argues.

At the same time, they also forecast copper to reach $7,500/ton in 3 months' time, and zinc to reach $4,000/ton in the same time frame.

Commodities are enjoying a solid day so far, as positive risk sentiment is reverberating throughout markets - with gold up by 0.72% currently, also helped by a softer US dollar.

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