Goldman Sachs: Maintains optimistic forecast of $5400 gold price by year end.

Goldman Sachs has stated that the recent drop in gold prices is broadly consistent with past trends, pointing out that the increase in interest rate expectations and market volatility are the main factors driving the price down. The co-head of the bank's global commodities research department, Dan Strum, said on Wednesday, "Given our current pricing framework, this decline is not surprising." He noted that the rise in interest rate expectations has already affected investor demand, especially through ETFs. Extreme market pressures can also impact gold prices, as investors facing margin calls often sell off gold along with other assets. He also pointed out that the recent rise in gold prices has exceeded fundamental expectations, with some pullback reflecting "a certain degree of normalization." However, Goldman Sachs maintains its optimistic overall outlook, expecting gold prices to reach $4,500 by the end of the year. The reason for this is the continued central bank buying of gold by governments as they seek asset diversification.