Georgette Boele, analyst at ABN AMRO, suggests that they strongly believe that the surge in gold prices has happened because of broad dollar weakness rather than safe haven demand for gold and remain positive on the outlook for gold.

“First, the decline in gold prices came to a halt above and relatively closely to the 200-day moving average, and thereafter prices bounced higher. This is a positive development from a technical point of view, and strengthens our case that gold prices will rally towards the end of this year. Our year-end target is USD 1,400 per ounce. Second, the developments on the trade front have decreased the likelihood of tighter central bank policy around the globe. In fact, easier monetary policy is far more likely at this point in time. Third, the US dollar is struggling to rally in the current risk-off environment. This is because financial markets fear the policy uncertainty that comes with President Trump’s increasingly erratic trade policy. So, the US dollar is likely also being punished because the US’s longer term credibility is weakening. Fourth, we expect the Chinese authorities to step up stimulus to support the economy. It is likely that.”