Analysts at Goldman Sachs (NYSE:GS) predict that gold prices already at 6-year highs will climb to $1,600 oz over the next 6 months as investors seek safe-havens.
The dimming global economic outlook, driven by heightening trade tensions between the US and China are boosting gold’s appeal as a hedge against financial chaos.
“If growth worries persist, possibly due to a trade war escalation, gold could go even higher, driven by a larger ETF gold allocation from portfolio managers who still continue to under-own gold,” Goldman analysts said in a note Wednesday. “Gold ETFs have recently built momentum almost as strong as in 2016, and we believe that can be maintained in the short-term.”
Gold holdings in ETFs rose to the highest levels since April 2013. The argument for owning gold as protection to 1’s wealth grew after the market value of the Barclays Global Negative Yielding Debt Index closed at a record $15-T at the start of the week.
Industrial production in Germany saw its biggest annual decliner in almost 10 years, adding to fears that the world economy could be moving closer to its 1st recession in a decade.
In the Asia Pacific/Oceania region, central banks in New Zealand, India and Thailand made surprise interest-rate cuts as they sought to shield their economies from global headwinds.
Their moves came a week after the Fed lowered US borrowing costs for the 1st time since Y 2008
Last week, a Bank of America Merrill Lynch analyst said the precious Yellow metal could climb toward $2,000 in the next 2 years, as “the recent Dovish tilt by central banks, accompanied by increases of negative yielding assets” provide a good backdrop that could sustain the rally.
Gold reached a record $1,921.17 oz in the spot market in Y 2011.
Shayne and I believe that there are further rate cuts coming. Talk about easing in other parts of the world as well, that drowns out everything else on the USD. Increased volatility could see gold prices spike above Goldie’s base case forecast of $1,500, fueling this rally.
Gold rose as much as 2.4% in the spot market Wednesday to $1,510.46 oz the highest since April 2013. On the COMEX in New York, futures touched $1,522.70, before settling at $1,519.60 at 1:30p EDT.
Goldman raised its Y 2019 outlook for ETF demand to 600 tonnes this year, from 300 tonnes, and boosted its 6-month price forecast to $1,600 after the metal surpassed the bank’s previous target of $1,475.
We here are HeffX-LTN are Bullish and have been since December 2018 forecasting prices could rise to as high as $1,500 by years end, it has happened 5 months early.