Gold surging to $1 400 for BofA as long-term rates stay low

Gold’s on track to climb to a four-year high of $1 400/oz by early next year, buoyed by lower long-term US interest rates and lack of progress by President Donald Trump in delivering economic reforms, according to the global head of commodities research at Bank of America Merrill Lynch. Prices will also rise in dollar terms as a shift in economic cycles between the US and Europe strengthens the euro, Francisco Blanch said in a phone interview on Monday. The Federal Reserve is not tightening as fast as people expected, and the European Central Bank is set to start tapering, so “some of that leads to a higher euro eventually, combined with more stagnant long-term rates in the US, and that’s a tailwind for gold,” he said.