Bullish factors building in the bullion market are set to see prices take out the record set in 2011, according to Citigroup Inc.

Prices are benefiting from loose monetary policy, low real yields, record inflows into exchange-traded funds and increased asset allocation, analysts including Ed Morse wrote in the bank’s third-quarter commodities outlook. Gold is expected climb to an all-time high in the next six-to-nine months, and there’s a 30 per cent probability it’ll top US$2,000 an ounce in the next three-to-five months.

“Nominal gold prices have already posted fresh records in every other G-10 and major emerging market currency this year,” the Citigroup analysts said. “It is only a matter of time for fresh” highs in U.S. dollars, they said.

Gold has surged 19 per cent this year to the highest in almost nine years as the coronavirus pandemic drove investors to havens, while easier monetary policy and other measures to shore up economies also supported demand. Citigroup is among a long line of market watchers in predicting bullion will either test or top its long-standing record as the resurgence of virus cases in several parts of the world point to a prolonged and uneven global economic recovery.

Spot gold fell 0.1 per cent to US$1,808.58/oz at 12:52 p.m. in Singapore, following six straight weeks of gains. Prices are about six per cent away from the all-time high of US$1,921.17 set in 2011.

On the stimulus front, the four European Union governments that have been holding up negotiations over a massive package to reboot the bloc’s economy are ready to agree on a key plank of the deal. In the U.S., talks on a new stimulus package will start at the White House on Monday, while the Federal Reserve meets next week amid pressure for potentially more action as the virus resurgence is clouding the economic outlook. President Donald Trump played down rising cases.

In other forecasts, Citigroup was bullish on silver and palladium on a six-to-12 month view. Silver is expected to rise to US$25 an ounce over that period on sustained investment demand and a recovery in global growth. The bank recommends buying palladium on dips, with prices rising to US$2,200 by year-end.

Spot silver retreated 0.1 per cent to US$19.3084, while palladium rose 0.2 per cent to US$2,023.54.