Troubling signs of an economic slowdown, amid speculation that further intense rate hikes are just around the corner and could trigger a recession, are again fuelling the gold bulls as we move into the second half of the year.
Investment bank Goldman Sachs is the latest to throw its weight behind gold, with a significant increase in its price expectations. Revising its previous forecast to the upside in a new report issued this week, the US bank says that it now sees gold roaring towards year end with substantial momentum.
Unsurprisingly, Goldman Sach’s higher expectations for gold prices come as it warns that recession warning flags continue to appear, setting the scene for another run to unprecedented gold prices before we hit the end of the year.
Goldman Sach’s analysts say they are now targeting gold prices of £2,061 ($2,500) by December, which means that we should expect to see strong momentum to the upside over the coming months.
The report notes that inflation remains persistently high and will likely be a favourable force for gold across the rest of the year, helping it to easily outperform other assets. Another factor in gold’s favour is that it isn’t subject to inflation in the same way as stocks and bonds, meaning it won’t see its worth diminished by the budget-busting levels of inflation that have become the norm over the last 12 months.
Analysts say that the ongoing conflict in Ukraine could also support gold, while equities values decline.
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