Goldman Sachs is bullish on gold and says that it fully expects to see the precious metal reaching previous highs of £1,578 ($2,075) as a baseline prediction.
Damian Courvalin, who is the Head of Energy Research at the investment bank says that gold is entering a very favourable period thanks to the culmination of several factors. Most notably, the bank says the current high inflation environment favours the precious metal and gives it momentum to race back to and pass its previous all-time high.
He noted, “long-dated rates and real interest rates matter most for gold” while also saying that rising inflation makes gold a very attractive portfolio hedge. Confirming that Goldman Sachs is expecting extremely strong performance from gold he added, “our base case for gold is $2k and one should be open to some serious future upside”.
The bank also says that it expects to see a strong uptick in Central Bank demand for gold, with nations such as China already showing signs of this.
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