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Heraeus calls for $2,200 gold price and $35 silver price for year end

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(Kitco News) - The gold and silver are pushing to the top of their recent trading ranges as precious metals benefit from shifting long-term interest rate expectations and a weaker dollar.

In a report Tuesday, one precious metals firm said it continues to see more upside potential for gold and silver. Analysts at Heraeus Precious Metals said that they see gold prices pushing to $2,200 an ounce by the end of the year.

Heraeus’s updated year-end target represents an 11% gain from current prices; December gold futures last traded at $1,982 an ounce.

“A combination of low-to-negative government bond yields and unprecedented fiscal and monetary stimulus has driven safe-haven gold demand in the year to date,” the analysts said. “The macroeconomic and geopolitical landscape is expected to remain supportive of gold for the rest of the year.”

Although a lot of political and economic uncertainty has been priced into the markets, the analysts said that conditions could continue to deteriorate.

“Investors will continue to see gold as a safe haven, pushing prices higher,” the analyst said.

Although investment demand is expected to remain healthy, the European precious metals firm said that higher gold prices will weigh on consumer demand. In the long-term, they said that this could be a strong headwind for higher prices.

As optimistic as Heraeus is regarding gold, it is nothing compared to their outlook for silver. The firm sees silver prices pushing to $35 an ounce by the end of the year, a gain of 21% from current prices. December silver last traded at $28.725 an ounce.

“Industrial demand is recovering, but investor demand must be sustained for this outperformance to continue. With the economic outlook still uncertain, further stimulus measures by governments or central banks could keep investors interested in silver,” the analysts said.

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