The surge in gold costs is being pushed by a possible shift within the U.S. Fed in the direction of an inflationary bias to account for political tensions and an expectations that coronavirus infections will rise, Goldman mentioned.
Elevated safe-haven shopping for has pushed spot gold costs 27% larger thus far this yr, as bullion surged to a report excessive of $1,980.57 on Tuesday.
“We’ve lengthy maintained gold is the forex of final resort, notably in an setting like the present one the place governments are debasing their fiat currencies and pushing actual rates of interest to all-time lows,” Goldman mentioned.
“We see inflationary considerations persevering with to rise properly into the financial restoration, sustaining hedging inflows into gold ETFs alongside the structural weakening of the greenback, we see gold getting used as a greenback hedge by fund managers,” Goldman mentioned.
The financial institution additionally raised its silver value forecast to $30/toz on a 3/6/12 month horizon “pulled upward by larger gold costs and higher prospects for silver industrial demand, notably in photo voltaic power.”