“In this softer cyclical environment, gold stands out as the commodity where we have the highest confidence in near-term upside. They point to three factors in particular that could push gold prices higher: Central bank purchases: Since Russia’s invasion of Ukraine in 2022, central banks have been buying gold at a brisk pace (…) Goldman Sachs Research expects the buying spree to persist amid concerns about US financial sanctions and the growing US sovereign debt burden. Fed rate cuts: Higher interest rates tend to make gold, which doesn’t offer a yield, less attractive to investors. Rate cuts by the Fed will likely bring Western investors back into the gold market after largely being absent during the metal’s sharp rally over the past two years. Potential geopolitical shocks: Gold offers significant value as a portfolio hedge against developments such as tariffs, Fed subordination risk (i.e., the risk that its independence may be undermined), and debt sustainability fears. Our researchers see roughly 15% upside in gold prices under a rise in financial sanctions equal to the rise seen since 2021, and similar gains if mounting debt concerns spur US government credit-default swap spreads (a measure of credit worthiness) to widen by 1 standard deviation.” Læs hele analysen her.
Morten W. Langer
