Goldman Sachs on Tuesday raised its gold price forecasts for the coming months, citing stronger net speculative positioning and a recently weaker U.S. dollar.
The influential bank said it has revised its three-, six- and 12-month price outlooks for gold, raising them respectively to $1,200 per ounce, $1,180 per ounce and $1,150 per ounce, from $1,100 per ounce, $1,050 per ounce and $1,000 per ounce in an earlier forecast.
Gold rose above $1,200 an ounce in early February for the first time since mid-2015, gaining as the greenback weakened in anticipation of coming interest rate hikes by the U.S. Federal Reserve. Gold has now been holding above $1,250 for most of the past three weeks.
Still, Goldman cautioned that there was still not much scope for further increases in gold.
"Looking ahead, we see limited upside for gold pricing given the limited room for the Fed to surprise to the downside, limited room for the dollar to depreciate, and limited room for China to drive (emerging market) currency strength to contribute to dollar weakness" the bank said in its note.
The U.S. dollar's index against a basket of major currencies rose to a near two-week high on Tuesday, having recovered 2.5 percent from last week's 16-month low.