BNP Paribas Sees $5,000 Gold as Dollar Weakness Takes Hold

BNP Paribas Wealth Management predicts that gold will reach $5,000 an ounce within the next 12 months. This forecast was made by Shafali, Head of Investment Services Asia at BNP Paribas Wealth Management, on Bloomberg's Insight with Haslinda Amin.

The prediction implies over a 20% upside from current levels and is based on the bank's view that bullion has substantial upside along with other precious metals. According to Shafali, the asset class has not performed as expected due to stronger dollar and concerns about interest rate hikes.

The bank's demand thesis rests on two pillars: official-sector buying and retail ETF flows. Shafali pointed to World Gold Council survey data, which shows that 89% of central banks expect to increase their allocation to gold. Additionally, the recent calming of geopolitical tensions is expected to bring back retail ETF flows into the market.