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Barclays' Moser is looking for more upside in gold

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(Kitco News) - Gerald Moser, chief market strategist at Barclays Bank, said that the price of gold could go up by as much as 20 percent over the next 12 months but warned that the gold retail sector will take time to recover from pandemic.

He said "I wouldn't be surprised if, over the next 12 months, you see the gold price going up by another ten to 20 percent," he told Arabian Business.

According to the World Gold Council (WGC), gold jewelry demand in the UAE slumped 86 percent in the second quarter of the year to just 1.3 tonnes, compared to 9.3 tonnes in the same period last year, largely as a result of the restrictions introduced to curb the spread of coronavirus.

Moser said: "I think we probably need a vaccine and basically the world going back to what it was before, or something close to what it was before, for the demand for gold in retail to meaningfully pick-up."

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"On the seasonality side, we might see a bit of that. We also need to think about weddings that have been postponed and the fact that it's going to be difficult for people to meet in huge family gatherings around Christmas," he said.

He added "It's going to be difficult for the demand on the retail side to meaningfully recover, even going into the festive season. I think it's going to be more towards the middle and second half of next year when hopefully there's some more progress on the vaccine side."

The precious white metal, however, will continue to be an attractive proposition for investors, which is currently delivering returns of between 23-25 percent, according to Moser, the second or third best annual performance since the 1990s. "In 2007 it was at 30 percent and we are not far from this," he said.

He added: "I think with the deficit increasing so much during the Covid crisis, we've seen fiscal stimulus pretty much everywhere and that means the debt level is up around 20 percentage points, pretty much everywhere in the world.

"It means that interest rates are going to stay low for a long time, the Fed is talking until 2023 at least, and that means it's a very good environment for gold."

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.