As gold scales all-time highs, Wall Street analysts say it has even further to go

Gold prices pushed higher Tuesday after futures pricing for the precious metal notched fresh records in the previous two sessions — with analysts seeing strength lasting at least into the second half of the year.

The gold contract for April on Monday closed above $2,100 per ounce for the first time, and was up 0.37% at $2,134.2 at 1:15 p.m. in London. Spot gold was trading 0.7% higher at $2,129, though market-watchers note that in real terms, adjusted for inflation, gold is well below past peaks.

In a Monday note, analysts at Citi described themselves as "medium-term bullion bulls," calling a 25% probability of gold averaging a record $2,300 per ounce in the second half. Their base case remains $2,150, and they reiterated a "wildcard" call for trade reaching $3,000 over the next 12 to 16 months.

Citi describes gold as a developed market "recession hedge," and increasingly see tailwinds from uncertainty around the U.S. election in November.

Analysts at Berenberg also noted Monday that a Donald Trump victory in the election would provide a "major positive for gold," with further support for the safe-haven asset from volatility around the ongoing wars in Ukraine and Gaza.

As a result they see momentum ahead for gold-linked stocks, which they say have recently "disconnected from the underlying commodity" despite recent near-record prices.

"This is mainly down to better-than-expected economic performance from the U.S., as well as a persistently hawkish stance on monetary policy from the U.S. Federal Reserve," they said.

Higher interest rates are generally linked with a decline in gold as higher-yielding assets become more attractive, with the recent price rally both in late 2023 and in recent days driven by expectations of coming