Goldman Sachs reiterates its bullish outlook on gold prices.
Keep buying gold, the ultimate safe haven will not disappoint you. So say analysts at Goldman Sachs, led by Daan Struyven.
Despite the recent pullback in gold prices since Donald Trump’s victory in the USA Elections, the team has released a note with the title “ Go for gold .”
The experts reaffirm their target price for gold of $3,000 per ounce by December 2025.
Why?
Multiple factors contribute to this outlook. Among them are increased demand for bullion from central banks worldwide and the anticipated rate cuts that Jerome Powell’s Federal Reserve is likely to continue announcing.
Gold Buying by Central Banks
Goldman Sachs described this trend as a structural support for the metal’s price.
The gold rush isn’t over after the Trump shock
According to Goldman Sachs analysts, the gold rush of 2024 is far from over and is expected to persist into 2025.
This follows the temporary price declines after Election Day, which saw Donald Trump re-elected as President of the United States.
Goldman Sachs disagrees with those envisioning less bullish scenarios for gold, citing a key geopolitical factor: heightened tensions under Trump, especially between the U.S. and Iran.
The analysts note that Trump’s new administration further raises the risks to Iran supply” adding that "a potential strengthening in US support to Israel may also increase the probability of disruptions to Iran’s oil assets.”
Central banks, particularly those holding large reserves of U.S. Treasuries, could increase their gold purchases. This heightened demand would provide further support for prices.
Goldman Sachs’ optimism about gold has sparked renewed interest in the safe haven asset, following its worst week since 2021. Many traders had exited their gold positions during the initial post-election sessions, turning to riskier assets amid optimism surrounding Trump’s return to the White House.
Trump’s pro-business stance, including his advocacy for deregulation, has fueled investor interest in stocks over assets like gold. The president-elect has long championed policies aimed at rolling back regulatory hurdles for Wall Street and Corporate America.
The investment bank has reiterated that it’s premature to declare the end of gold’s bullish run.
Fed Rate Cuts: Are They at Risk Under Trump? Goldman Sachs Says Not So Fast
Traders are also speculating about the Federal Reserve’s next moves.
Lower interest rates typically reduce the appeal of yield-bearing assets, benefiting zero-yield assets like gold.
While Trump’s presidency could complicate expectations of major Fed rate cuts, not all experts agree.
Last week, Fed Chair Jerome Powell’s comments unsettled markets, but key voices, such as Federal Reserve Bank of Chicago President Austan Goolsbee, have reaffirmed the likelihood of further cuts.
Goolsbee suggested that if inflation continues to decline toward the Fed’s 2% target, rates could drop "a lot" over the next 12–18 months.
Similarly, Boston Fed President Susan Collins believes another cut in December remains plausible.
Goldman Sachs’ support for gold prices is already evident. The spot price of gold has rebounded above $2,600 per ounce, bringing its year-to-date gain to +26%.
The fever for gold, it seems, still has plenty of room to run.
Original article published on Money.it Italy 2024-11-18 17:10:13. Original title: Febbre oro anche con Trump, Goldman Sachs dice “Go for gold”. Spinta tassi Fed c’è ancora
