Gold is Goldman Sachs' favorite commodity
(Kitco News) - Goldman Sachs continued to reiterate its bullish outlook for gold with the firm ’s global head of commodity Jeffrey Currie saying in an interview with Bloomberg TV that the yellow metal is his favorite commodity to trade.
“There are a lot of reasons to still hold gold,” he said in the interview. “Foremost is that you are still seeing the debasement effects of all the stimulus measures.”
The latest comments from Currie don ’t come as a surprise as the investment bank has been fairly bullish on gold since the start of the year. The positive sentiment has been amplified as governments and central banks around the world have pumped massive liquidity into financial markets, to protect the global economy that has been devastated by the COVID-19 pandemic.
In March, as the Federal Reserve dropped interest rates to the zero-bound target and introduced unlimited quantitative easing measures, Goldman Sachs described gold as “the currency of last resort.”
In its March report, the analysts said that they see gold prices pushing to $1,800 an ounce within the next 12 months.
While the U.S. central bank has committed to “doing whatever it takes” to support the economy, on Wednesday, Federal Reserve Chair Jerome Powell rejected the idea of lowering interest rates into negative territory.
Although Powell ’s comments created some volatility in gold prices, the market has since recovered. Gold prices are trading near a three-week high as safe-haven interest in the precious metal picks up. June gold futures last traded at $1,739.6 an ounce, up 1.35% on the day.