London — Gold is likely to be trading at $1,250/oz and Eur1,200/oz by the end of 2015, Commerzbank said Wednesday.
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That implies the euro would be trading around $1.042 at the end of the year, Platts calculated, a level last seen early 2003 and compared with $1.130 at 1230 GMT.
The German bank noted the price of gold was up as much as 10% in parts of January, despite the firmer dollar, owing to a culmination of factors.
"The gains were triggered by the announcement of extensive bond purchases by the European Central Bank, the surprising decoupling of the Swiss franc from the euro by the Swiss National Bank and the renewed flaring up of the Greek debt crisis following the election victory of Syriza," it said.
Although it believes that the gold price is likely to continue benefiting from the "ultra-loose monetary policy pursued by the ECB, we expect the gold price to suffer a renewed setback in the summer months because the market is underestimating the [US Federal Reserve's] interest rate hikes."
Many are factoring in the likelihood of a small US interest rate rise because of an improving US economy and jobs market.
Any increase would be bearish for the gold price, as its use as a hedge against riskier assets -- such as stock markets -- would be less attractive.
The London Bullion Market Association Gold Price settled at $1,235.50/oz Wednesday morning.
--Ben Kilbey, email@example.com
--Edited by Dan Lalor, firstname.lastname@example.org