EBC Markets Briefing | Bullion firms with peace deal in question

Bullion held firm on Wednesday on the back of tense Russia-Ukraine negotiations. Ukraine President Zelenskiy said no peace deal could be made behind his back.

Goldman Sachs raised its year-end gold target to $3,100 an ounce on central-bank buying and inflows into bullion-backed ETFs, highlighting Wall Street’s enthusiasm for the metal.

Should uncertainty over economic policy persist, including on tariffs, bullion could hit $3,300 an ounce on higher speculative positioning, according to the bank.

Citigroup said earlier this month that it expects prices to hit $3,000 an ounce within three months, with geopolitical tensions and trade wars stoked by Trump boosting demand for haven assets.

There are structural shifts that are creating a bullish backdrop for the precious metal. Central bank buying has been the biggest driver of the market instead of Chinese and Indian consumer demand.

While the central bank buying is hardly predictable, investment flows may help underpin the ongoing rally. Gold ETFs added $3 billion in January, led by Europe that is mired in geopolitical malaise.

Gold has returned to the overbought territory amid sigs of a triple top pattern, so it will likely head back to $2,900.

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