Key Points:
- Goldman Sachs on Friday updated its three-, six- and 12-month gold price forecasts to $1800/1900/2000/toz from $1600/1650/1800/toz and maintained its long December 2020 gold trading recommendation.
- Goldman analysts attributed the recent indecision to a conflict between the negative “wealth” shock to emerging market consumers and a positive “fear-driven” investment demand in developed markets.
- HSBC Senior Precious Metals Analyst James Steele said fundamental drivers of gold prices should be the low yield environment, substantial fiscal and monetary stimulus and the inflationary impact on asset prices.
Despite struggling for direction since its sharp gains at the height of the coronavirus crisis, Goldman Sachs analysts are backing gold to rally further on the back of debasement fears and a weakening dollar.
The precious metal was trading just above $1,736 per troy ounce on Friday afternoon in Europe, up around 0.8% on the day. Gold prices had plateaued somewhat over the past two months as hopes of containment of the pandemic boosted risk sentiment and halted the rally triggered by the global spread of Covid-19 in mid-March.
But in a note Friday, Goldman Sachs updated its three-, six- and 12-month gold price forecasts to $1800/1900/2000/toz from $1600/1650/1800/toz and maintained its long December 2020 gold trading recommendation.
