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Crisis profiteer: After a new record high: Goldman Sachs raises gold price forecast | message


Brsen recover from the crash
Uncertainty about the progress of the crisis remains
Gold price is picking up
Goldman Sachs analysts raise gold price forecast


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The corona pandemic has been in the markets for over half a year now. Most of the stock markets have since recovered from their spring crash lows, but there is still some uncertainty. So nobody can say when the economy will have recovered from the pandemic or whether – as some experts predict – there will be a second wave in autumn and possible new lockdowns.

But while the Corona crisis has shaken the economy as a whole and some stocks from particularly affected sectors have gone down steeply, there have also been profiteers in this crisis. In 2020, these clearly include gold, which investors are increasingly heading for as a safe haven in uncertain times.

Uncertainties and fear of devaluation

Fears of renewed setbacks in the US economy have increased in the recent past, while the number of new infections in the US has continued to increase. While central banks and politicians in large industrialized nations have pleaded against the effects of the pandemic and supported the economic stimulus – enormous aid packages have been put together – the fear of many investors of rising inflation is growing.

Driven by “a possible shift of the US Federal Reserve towards an inflationary tendency against the background of increasing geopolitical tensions, increased domestic political and social uncertainty in the USA and a growing second wave of COVID-19-related infections”, the rise from gold to new MarketWatch has recently outperformed gains in real interest rates and other alternatives to the dollar, a team of analysts from Goldman Sachs, led by Jeffrey Currie, reports.

Gold output declines

In addition, the corona crisis also affects gold production. As reported by dpa, Heraeus expert Hans-Gnther Ritter referred to statements by the World Gold Council, according to which mine production in key producing countries fell by three percent in the first quarter of the year, the lowest amount since 2015. No data are available for the second quarter of the year, but Heraeus expects the recovery to be minimal.

Weak US dollar

Another support for the gold price is the current development on the foreign exchange market: The US dollar has come under pressure in the recent past due to the uncertainty about the further development of the US economy. “Combined with a record level of debt accumulation by the United States government, genuine concerns about the longevity of the US dollar as a reserve currency have emerged,” MarketWatch quoted Jeffrey Currie’s team. Gold, which is traded in US dollars on the world market, becomes cheaper with a weaker US dollar outside the dollar zone – which further increases demand.

Goldman Sachs with new gold price forecast

These factors caused the gold price to rise steadily this year after a temporary slump in March. Since the beginning of the year, it has grown by more than a quarter. Above all, however, things have been going up steeply since mid-June, so that gold in July continued to approach its record high of September 2011, which was $ 1,921, until the night of Monday, July 27 then it was actually cracked.

This prompted Goldman Sachs experts to abandon their $ 2,000 gold price forecast to date – and they now expect gold prices to rise to $ 2,300 within the next 12 months.

And not only gold is one of the winners as a safe haven in times of crisis, silver also benefited from the uncertainty on the market and only recently rose to its highest level in seven years. Goldman Sachs therefore raised its silver price outlook from $ 22 an ounce to $ 30.

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