Wealthy people are stocking up on physical gold: bullion, coins and bars, according to a recent note from Goldman Sachs. As a result investors who are Bullish on gold say it’s the precious Yellow metal’s moment to shine.
“I think gold’s going to $2,500, $3,000 an ounce in the 2020s because the climate—the landscape for gold is so hugely supportive.” said Heritage Capital President in an interview Wednesday.
In a recent note Goldman Sachs presented reasons for owning gold citing recession concerns and political uncertainty as catalysts for an investor shift to gold.
Over the past year, gold prices have risen nearly 20% and gold is on pace for its best year in 10. By Y 2020, Goldman thinks the price of gold will reach $1,600 an ounce.
Goldman’s forecast is too low, 1,600 oz is going to be a footnote.
What’s interesting this cycle is that it is not just gold ETFs and other abstract investments driving demand for gold, but people buying actual gold bullion.
In Goldman’s view that squares with demand for vaults and everything. But I just think end of the world trades are fun, and it seems like the global rich want the real thing.
We believe that an individual investor should have 10-15% in some capacity in precious metals. People who do not trust the markets, do not trust paper will want to buy gold coins.
Buy what makes you comfortable: gold stocks, GLD and/or gold coins? Fine.
For people who do not want to store physical gold, in the manner of bars and coins, in their basement, gold ETFs are an alternative. If you want to leverage play, you play the miner’s stock ETF, it as a practical way to own gold.