The spread of the coronavirus throughout China and to other countries has concerned investors on alert, and many are flocking to gold as a safe haven asset. On Monday, gold prices jumped 2 percent to a seven-year highwater mark as fears of the virus’ potential impact on global economic growth spurred buying.
Spot gold was up 2 percent to $1,675.76 per ounce after hitting $1,688.66, its highest level since January 2013, while gold futures were up 1.9 percent to $1,681.40. Around this time last year, gold was selling at $1,336.73.
UBS stated that shorter-term prices look set to test new highs, which could mean gold topping $1,650 in the coming weeks. However, UBS cautioned that potential gains could be capped if the coronavirus-related disruptions are limited to the first quarter.
Citi is even more bullish. Last week, the firm raised its six-to-12-month target on gold to $1,700 per ounce and said that gold could top the $2,000 level in the next 12 to 24 months.