Fearless of short-term pullbacks! Goldman Sachs firmly bullish on gold: Aiming for $3000 next year.
18/11/2024
GMT Eight
Goldman Sachs Group (GS) stated that, due to purchases by major central banks and the rate cuts in the United States, the price of gold is expected to rise to record levels next year. GS has listed gold as one of the preferred commodities for trading in 2025, and suggests that the price of gold may continue to rise during Donald Trump's presidency.
GS analysts, including Daan Struyven, stated in a report, "Buy gold." They reiterated that the price of gold is expected to reach $3,000 per ounce by December 2025. They pointed out that the structural driving factors for this prediction will be an increase in demand from central banks, and as the Federal Reserve cuts interest rates, funds flowing into exchange traded funds (ETFs) will provide a cyclical boost.
GS predicts that the price of gold will continue to rise.
This year, the price of gold rebounded strongly and reached new highs consecutively, but declined after Trump won the U.S. election. The increase in the price of gold was due to increased official purchases and the Federal Reserve's shift to loose policies. GS indicated that the Trump administration may also provide support for the price of gold.
GS analysts stated that escalating trade tensions may boost speculative positions in gold. Additionally, concerns about the sustainability of the U.S. fiscal situation are increasing, which could also boost the price of gold. They pointed out that major central banks, especially those holding large reserves of U.S. treasury bonds, may choose to buy more gold.
The latest spot gold price is $2,589 per ounce, reaching as high as $2,790 last month. Spot gold fell by 4.58% last week, marking the largest weekly drop since June 2021.
In other areas, GS analysts predict that Brent crude oil prices will range between $70 to $85 per barrel next year, but there is short-term upside risk if the Trump administration restricts Iran's oil exports. They stated that precious metals are more favored than base metals, and there is upside risk for European natural gas in the short term due to weather conditions.
Analysts said, "The new U.S. government has increased the risks facing Iran's supply." They pointed out that the U.S. may increase sanctions. "The U.S. may strengthen support for Israel, and may increase the likelihood of disruption in Iran's oil assets."