Why Are Analysts Raising Their Gold Price Estimates for 2019?


Jan. 25 2019, Updated 5:20 p.m. ET

Analysts are bullish on gold in 2019

As we discussed in Bulls versus Bears on Wall Street: Time to Buy Gold in 2019?, most analysts are bullish on gold’s price prospects in 2019. Despite gold’s (GLD) relative underperformance in 2019 year-to-date, analysts have grown even more positive on the metal. As we’ll discuss in this part, many analysts have raised their price targets for gold (SGDM) in 2019.

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Goldman’s bullish view on gold

Goldman Sachs (GS) turned even more bullish on gold in 2019. On January 10, as reported by CNBC, Goldman Sachs analyst Jeffrey Currie raised the price forecast for gold to $1,325, $1,375, and $1,425 per ounce for the next three, six, and 12 months, respectively. The forecast implies an almost 10% upside to gold’s price in the next 12 months. Currie expects gold prices to be supported by more demand for defensive assets. He also thinks that rising geopolitical tensions should incentivize “more central banks to re-enter the gold market.”

CIBC and Societe General

On January 21, CIBC raised its target price for gold from $1,300 per ounce to $1,350 per ounce for 2019. The forecast for 2020 is still higher at $1,400 per ounce. As reported by Kitco, CIBC’s analysts wrote in a note, “Slowing growth combined with lowered rate-hike expectations, Brexit uncertainty, and constructive demand-supply fundamentals for gold drive our positive outlook for precious metals demand over the next two years.” CIBC’s top picks in the gold sector include Agnico Eagle Mines (AEM), Barrick Gold (GOLD), Franco-Nevada (FNV), and Wheaton Precious Metals (WPM).

Societe General is also “moderately bullish on gold” as reported by Kitco. Societe General’s reason for its positive stance on gold is the potential for a short covering of bearish bets by money managers. It believes that the current market volatility and concerns of a potential recession should shift some investors from risk assets towards gold. It has a gold price target of $1,300 per ounce in the next six months and $1,375 per ounce in 12 months.


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