As gold prices reach unprecedented levels in 2024, topping $2,400 an ounce last month, Goldman Sachs forecasts a potential rise to over $3,000 by year’s end, driven by robust demand and global economic uncertainties.
The surge in gold prices has been significantly driven by the active participation of central banks and consumer demand in Asia, despite economic recovery challenges and currency depreciation.
The People’s Bank of China (PBOC) has increased its gold reserves for 17 consecutive months, adding 160,000 ounces in March alone.
This aggressive acquisition is mirrored by other nations like Turkey, India, and Kazakhstan, which are diversifying their reserves to decrease dependency on the US dollar.
Central banks and consumers propel gold demand
The Federal Reserve’s recent policy decisions have also played a critical role in boosting the allure of gold.
By maintaining interest rates and suggesting the unlikelihood of future hikes, Fed Chair Jerome Powell has made gold—an asset that does not yield interest—more attractive compared to fixed-income assets.
These policies have helped keep gold prices stable above $2,300, despite other market fluctuations.
Geopolitical tensions underscore gold’s safe-haven status
Ongoing geopolitical unrest, particularly in the Middle East, has reinforced gold’s reputation as a reliable safe-haven asset. In times of global instability, investors often turn to gold for its perceived safety, contributing to its price resilience and attractiveness as an investment during uncertain times.
Goldman Sachs’s bullish outlook on gold
Strategists at Goldman Sachs remain optimistic about the future trajectory of gold prices, projecting a target of $2,700 per troy ounce by the end of the year—a 17% increase from current levels.
As analysts highlight potential scenarios that could push prices even higher, many investors have been opening a gold trading account to invest in the precious metal.
For instance, an escalation in US financial sanctions similar to recent trends could drive gold prices up to $3,130 per troy ounce, spurred by increased central bank buying.
Moreover, a significant widening in the US 5-year Credit Default Swap spread could see prices rising to $3,080 per troy ounce.
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