Goldman Sachs analysts have lifted their gold-price predictions, projecting that the precious metal could hit $2,000 in a year amid a weakening dollar.

Goldman Sachs late last week updated its three-, six- and 12-month gold price forecasts to $1800/1900/2000/a troy ounce (toz) from $1600/1650/1800/toz and maintained its long December 2020 gold trading recommendation, CNBC said.

Gold prices on Tuesday held firm near a more than one-month peak scaled in the last session, as a rise in coronavirus infections fueled concerns of a second wave of the pandemic, Reuters said.

Spot gold was up 0.1% to $1,756.70 per ounce at 1154 GMT. On Monday, bullion hit $1,762.84, its highest since May 18. U.S. gold futures were up 0.3% to $1,771.20 per ounce.

“Gold investment demand tends to grow into the early stage of the economic recovery, driven by continued debasement concerns and lower real rates,” the note said.

“Simultaneously we see a material comeback from EM consumer demand boosted by easing of lockdowns and a weaker dollar,” CNBC quoted Goldman as saying.

Debasement refers to a depreciation in the value of a currency, particularly one based on a precious metal such as gold, by introducing additional metal of a lesser value, CNBC explained. It typically offers more money for government spending while increasing inflation.

As stock markets roar back from the coronavirus-led rout, advisers to the world's wealthy are urging them to hold more gold, questioning the strength of the rally and the long-term impact of global central banks' cash splurge, Reuters explained.

Before the COVID-19 pandemic, most private banks recommended their clients hold none or just a tiny amount of gold.

Now some are channeling up to 10% of their clients' portfolios into the yellow metal as the massive central bank stimulus reduces bond yields - making non-yielding gold more attractive - and raises the risk of inflation that would devalue other assets and currencies.

While gold prices have already risen 15% since the start of the year to over $1,750 an ounce, many private bankers bet that gold - a hedge for both inflation and deflation - has further to run.

"Our view is that the weight of monetary supply, expansion, is going to ultimately be debasing to the dollar, and the Fed commitments, which (are) anchoring real rates, make the case for gold pretty sturdy," said Lisa Shalett, Chief Investment Officer, Wealth Management at Morgan Stanley.

Nine private banks spoken to by Reuters, which collectively oversee around $6 trillion in assets for the world's ultra-rich, said they had advised clients to increase their allocation to gold. Of them, four provided forecasts and all saw prices ending the year higher than they are now.

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