Record high: Citigroup analysts think gold may climb to $2,000 an ounce

Gold prices could hit a record high within the next two years as slowing US growth and the prospect of interest rate cuts push investors to safer assets.

Citigroup analysts think gold may climb to $2,000 an ounce, surging past the $1,900 of eight years ago, as sentiment towards the global economy sours.

The rising risk of a global recession, the likelihood that the US central bank will cut interest rates to zero and uncertainty over the 2020 presidential election could 'buttress a bullish gold market environment', Citigroup said.

Investors are being drawn to gold at a time of negative bond yields. Bonds involve an investor giving a loan to a company or government, and getting a fixed amount of money back in intervals as interest.

But their popularity has soared as stock markets have looked shaky.

When bond prices pass a certain level, yields turn negative, meaning the bondholder is paying the government or company rather than the other way around. Nervous investors are now turning to gold in the hope that it will only increase in value.

Central banks around the world last year bought the most gold in 50 years, led by Russia. Gold was trading at $1,498.30 last night.

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