BofA Securities Raises 18-Month Price Target on Gold to $3000/oz.

BofA Securities raised its 18-month price target on gold from $2,000 to $3,000/oz. Meanwhile, the firm's 2021 average gold spot price was raised 25% to $2,012.

"True, a strong USD backdrop, reduced financial market volatility, and lower jewelry demand in India and China could remain headwinds for gold," the firm commented. "But beyond traditional gold supply and demand fundamentals, financial repression is back on an extraordinary scale. Rates in the US and most G-10 economies will likely be at or below zero for a very long period of time as central banks attempt to push inflation back above their targets. Beyond real rates, variables such as nominal GDP, central bank balance sheets, or official gold reserves will remain the key determinants of gold prices, in our view. As central banks and governments double their balance sheets and fiscal deficits respectively (we have also decided to up our 18m gold target from $2,000 to $3,000/oz."

The firm's top precious metals picks are: Wheaton Precious Metals Corp. (NYSE: WPM). Newmont Corporation (NYSE: NEM), and B2Gold Corp. (NYSE: BTG).

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