Goldman Sachs raises its year-end gold forecast to $2,700, from $2,300 previously

Goldman Sachs has updated its gold price forecast to $2,700 per ounce by year’s end.

GS says recent price rises are unrelated to the usual macroeconomic factors linked to gold, “real rates, growth expectations, and the dollar”

• “None of those traditional factors adequately explain the velocity and scale of the gold price move so far this year.”

GS cite:

• constant demand of central banks, including the People’s Bank of China (PBOC)
• increase in retail demand from Chinese investors
• uptick in the US gold demand, Wells Fargo estimating that Costco’s gold business was generating sales of up to $200 million monthly
• gold’s demand as a safe haven might grow depending on the fed rate cuts that might happen, and the results of the US elections.

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I’m surprised they didn’t mention the role of western governments’ asset forfeitures and the role that is likely playing in the demand for physical gold.

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