2024-02-24 12:02:57
Goldman Sachs expects gold to rise to $2,175 within a year
Goldman Sachs expects gold prices to rise as central banks buy the precious metal, and with strong retail demand in emerging markets, which boosts prices.
The bank said in a recent report that gold prices will rise by approximately 6% in the next 12 months, reaching $2,175 per ounce.
At the end of the week’s trading last Friday, the prices of the precious metal reached $2,026.20 per ounce, heading for slight weekly gains. US futures gained 0.3%, recording $2036.10 per ounce.
The report published by Bloomberg added that strong central bank purchases and high geopolitical tensions are pushing gold to rise in exchange for a lack of clarity regarding interest rates.
Central banks purchased an average of 1,060 tons from 2022 to 2023, compared to 509 tons purchased between 2016 and 2019.
This increase comes at a time when China is shifting its reserves away from the dollar, and countries such as Poland are also increasing their gold reserves.
He expects that “central bank purchases will remain strong against the backdrop of diversification of reserves by emerging market countries and increasing geopolitical tensions.”
Geopolitical tensions led to a continued rise in central bank gold holdings, despite the rise in bond yields in the United States.
Bets on lowering US interest rates receded before June, after Federal Reserve Governor Christopher Waller said that he was “in no rush” to lower interest rates.
The minutes of the meeting showed that a large number of policymakers during the last meeting of the Federal Reserve expressed their concerns about the risks of lowering interest rates too quickly.
Low interest rates make it more attractive to hold non-yielding bullion.
The high demand for retail sales of gold and jewelry supports this trend, especially in emerging markets.
In this context, the report made particular reference to consumers in India, Turkey and China, where gold in China was one of the best-performing assets in 2023, driven by weak consumer confidence and concerns about growth that led to increased demand for “safe haven” status.
About 40% of participants in a Hong Kong bank survey expected that gold would rise above $2,200 an ounce by the end of the year.
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