Goldman Sachs look for US$3000 gold – lower rates, central bank and investor buying cited

Goldman Sachs says the dip for gold was just a blip, its going higher. GS cite:

• easing monetary policy
• central bank buying
• investor buying

More:

• “Since 2022, gold prices have surged 40% even as US interest rates were climbing … That is very strange. Typically, higher interest rates make gold less attractive – because gold doesn’t pay any interest, unlike bonds.”

GS then trot out the familiar argument that in 2022, during Russia’s invasion of Ukraine and the subsequent freezing of Russia’s assets by Western countries, gold became an attractive option vs. the USD. Central banks globally bought to “diversify their reserves away from the dollar and into an asset no one can freeze … gold.”

Looking ahead:

• “We don’t see central bank demand slowing down,”
• “And with the Fed cutting rates, investors are jumping back in, too.”
• price could hit $3,000/oz by year-end

GS is not concerned about a stronger USD weighing on gold:

• “Fewer Fed cuts are the key downside risk to our $3,000
  end-2025 gold price forecast (not a stronger dollar),”

This article was written by Eamonn Sheridan at www.forexlive.com.