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TAKEAWAYS KEY
- Gold prices rose Thursday after Goldman Sachs increased its year-end forecast of the commodity to $3300 per troy ounce.
- Analysts Lina Thomas and Daan Struyven said their increased year-end target reflected higher-than-estimated inflows into gold by exchange-traded funds as well as “continued strong central bank gold demand.”
- Investors worried about the escalating trade conflicts and the prospects of U.S. economic expansion have benefited from gold, a safe-haven investment.
Gold prices rose Thursday after Goldman Sachs raised its forecast for the commodity at $3,300 per troy-ounce level on Wednesday.
The investment bank had a target of $3,100/oz previously. Gold prices, which have surpassed $3,000/oz on March 14, and are now around $3,045/oz, have jumped in the past year as investors, anxious about escalating trade wars and U.S. economic growth, have flocked to traditional safe havens.
Analysts Lina Thomas and Daan Struyven said their increased year-end target reflected higher-than-estimated inflows into gold by exchange-traded funds (ETFs) as well as “continued strong central bank gold demand.” They said that they expect large Asian central banks to “continue [their] rapid gold purchasing for another 3-6 year period.”
Analysts said that investors could find “entry-points” to gold under two cases A Russia-Ukraine Peace Deal that triggers speculative sales or a sharp fall in equities, leading to “margin driven gold liquidation.” They noted that Beijing’s rules allowing Chinese insurers the ability to purchase gold could limit the decline.
