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Citigroup's Edward Morse sees gold prices hitting $2,400

In a recent interview with CNBC's Indian affiliate channel Edward Morse, global head of commodities strategy at Citi Research, said that he sees gold prices eventually going to $2,400 an ounce; however, he added that the near-term price action remains volatile because of shifting interest rate expectations based on uncertain economic conditions.

Last week the Federal Reserve raised interest rates by 25 basis points and shifted to a more neutral policy stance. Morse said that while it's likely the central bank is done raising interest rates, investors will have to wait for more data to get a clearer picture.

Looking at gold's price action, Morse said that the recent push above $2,080 an ounce shows just how much potential there is in the marketplace. However, he added that gold's uptrend depends on a weaker U.S. dollar and lower interest rates.

"The gold prices are really an anticipation of what's going to happen to interest rates and what's going to happen to the U.S. dollar. Clearly, there is a lot of money to be made, but on the other hand, we've got to remember that [prices] are based on what the value of the dollar is portrayed to be," he said

"We certainly think it will go to $2,400 an ounce. Our probability on that is fairly high. We remain bullish on gold. But we have to remind investors that this is a choppy road, and they need patience," he added.

Source: kitco

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