Goldman Sachs’ investment bankers went one step further and updated their forecast for the gold price. They now expect gold to hit the $ 2,000 an ounce mark within the next 12 months. In May, the experts had already seen the gold target at USD 1,800.
Now analysts are predicting that low real interest rates and fears of an impairment of fiat money create the perfect environment for price increases, even though developed markets are slowly coming back from the lockdown due to the COVID19 pandemic.
Goldman Sachs believes that apart from the political uncertainties, these devaluation fears are the decisive factor for a further rise in the gold price after the corona crisis. A weaker US dollar will also strengthen the purchasing power of the most important gold consumers in the emerging markets as well as easing restrictions on the economy.
The analysts estimate that “fear-driven” investment demand caused gold to rise 18% this year, but a “wealth shock” triggered an 8% decline. The net effect is thus 10% according to Goldman Sachs. Gold rose by around 13% in the course of the year.
Last Friday, bankers updated their gold price forecasts over the three, six and 12 months to $ 1,800, $ 1,900 and $ 2,000 an ounce, respectively. Previously, they had assumed $ 1,600, $ 1,650 and $ 1,800. Goldman Sachs is also sticking to the long trading recommendation until December 2020.
Silver forecasts are rising – significantly
The analysts also raised their silver price forecasts. They expect the price to rise to $ 19 an ounce within three months, to $ 21 within six months and to $ 22 after 12 months. So far, Goldman Sachs had only expected $ 13.50, $ 14, and $ 15!
In order for the gold price to sustainably exceed the $ 2,000 mark, bankers believe that inflation must rise above the 2% target of the US Federal Reserve, which in turn has to react moderately.
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