Goldman Sachs continue to look for upside in gold
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(Kitco News) - The U.S. Goldman Sachs bank expects that the prices of the gold ounces would exceed $2500 this year. Economists at the bank said that this increase is due to the continued Russia-Ukraine war, and the slowdown of the world economy, alongside the increase in the raw material, and products after the imposing of the sanctions against Russia.
Tim Moe, Co-Head, Asian Economics, Strategy & Commodity Research, Goldman Sachs recently said "We still think that the markets are under pricing energy stocks and some of the metals and mining stocks. We think the gold has a place in the portfolio. If one combines the margin resilience, the high dividend paying theme, the compounding growth theme and then the real asset theme, that would guide in the direction of having a more insulated portfolio from the macro challenges and the headwinds that are buffeting markets now."
Gold has had a pretty decent climb today trading just over half a percent higher at $1956/oz. The stock market trends are still unclear with indices consolidating after a decent run since the COVID-19 pandemic. Holding gold in a portfolio could be a great hedge as inflation kicks up a notch and the Fed starts to raise interest rates. In real terms, interest rates are still negative and with the stock market, underperforming gold seems to be in favor. There has been some flow into physical ETFs in Europe this morning with some displaying strong technical signals. The U.S. market open could be interesting as the largest gold ETF (SPDR Gold Trust GLD) could see some movement.