Gold prices are likely to be buoyed by the "new normal" of elevated geopolitical tensions over the coming years, Citi analysts said Monday.
The geopolitical case for gold investment has been emboldened in recent months and it seems as strong today than at any point over the last four decades, Citi analysts said. As a result, gold prices were forecast to "push north of $1,400 per ounce for sustained periods" through to 2020.
Elections and political votes, military attacks and macroeconomic crises were recognized by Citi as some of the key geopolitical events likely to influence investment into gold. And while analysts said there was not a consistent pattern for gold price performance amid such times of global uncertainty, prices were seen to have rallied more frequently during these periods.
Investors tend to move into safe-haven assets such as gold, the Swiss franc and the Japanese yen in times of geopolitical turmoil as traditional assets such as stocks and bonds are often perceived as a more volatile investment.