Now that gold is hovering near record levels, analysts are raising their outlook on the shiny metal sector.
Citi hiked its gold price forecast to $2,800 per oz. It expects prices to rise to $3,000 within the next six to 12 months. To trade at that level, the U.S. labor market needs to deteriorate. That would pressure the Federal Reserve to cut interest rates.
Demand for gold may increase in the next year, especially in Asia. Asian countries increased their purchase of gold in the last few years. They prefer to hold gold instead of the U.S. dollar. As the U.S. interest costs on debt rise, it weakens the currency. In addition, gold supply growth is slowing down. That increases the value of gold.
Investors may consider Newmont Mining (NEM). The firm posted an 84.4% increase in revenue, to $4.61 billion, in the third quarter. NEM stock will open down as traders take profit.
Oil is moving in the other direction. Stock markets are dismissing the risks of rising geopolitical risks between Israel and Iran. They are also not concerned about the Russian-Urkaine war.
Although the Middle East oil producers might abandon a $100 per barrel price target, supply could fall. Thanks to a strengthening global economy, demand should outpace supply.
Investors may buy oil stocks like Exxon Mobil (XOM) or ConocoPhillips (COP).
