Bank of China expects gold price to rise to $1,400

Analysts at the Bank of China International expect gold prices to rise to $1,400 per troy ounce, as they believe the precious metal will benefit from a weak U.S. dollar, an expected decline in bond prices and the relatively high valuation of equities. As a result, investors will convert a larger portion of their portfolio of bonds and equities to the relatively undervalued commodities, and gold could also benefit from this.

Due to a depreciation of the dollar, the Gold price in this currency rose by more than 13% last year, the largest year-on-year increase since 2010. At the time of writing, the price of the precious metal stands at $1,327 per troy ounce, the highest level since September last year.

A rise to $1,400 per troy ounce seems within reach at the moment, especially if the dollar sinks further against the euro. Kitco technical analyst Jim Wyckoff is also positive about the price development of the precious metal. He notes that the price of gold in dollars still manages to rise, despite the fact that the stock markets keep breaking new records.

Rumors about China drive up gold prices

This week, the gold price continued to rise Rumors that China is planning to buy fewer US Treasury bonds, rumours that the Chinese authorities have Refuted Was. China's central bank is the largest foreign creditor of the United States with $1.2 trillion in U.S. Treasuries. If China decides to liquidate more dollar reserves for whatever reason, it could give a boost to the gold price.

While the price of gold in dollars rose sharply last year, the value of the precious metal in euros remained virtually unchanged on balance. Due to the appreciation of the euro, we in the eurozone will hardly notice the higher gold price. The stronger euro is beneficial for investors who Buy gold, but less favourable for investors who are currently Selling gold.