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

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.