Goldman Sachs has called for a long position on gold N times this year: target price of $2900!

Goldman Sachs continues to state in a report that it is expected that the price of gold will continue to hit a historical high at the beginning of 2025, continuing its record-breaking upward trend. In addition to the continuously rising geopolitical tensions (favorable for safe-haven assets such as gold), two factors are expected to further drive the price of gold upwards - declining interest rates and seemingly insatiable demand for gold from central banks of emerging market countries.

Goldman Sachs has raised its gold target price from $2,700 per ounce to $2,900 per ounce, indicating that from current levels, the price of gold is expected to rise by about 9%, which would be on top of the 29% increase in gold price so far this year.

On Friday, supported by safe-haven demand triggered by the Middle East conflict, spot gold climbed above the $2,660 mark.

Ajay Kedia, head of Kedia Commodities in Mumbai, stated that geopolitical tensions, especially the tensions between Israel and Iran, are supporting the price of gold, and unless these risks diminish, the price of gold may remain near record levels.

Goldman Sachs commodity strategist Lina Thomas stated, "We reiterate our long-term bullish view on gold due to the gradual boost from global interest rate cuts, structurally higher central bank demand, and gold's role as a hedge against geopolitical, financial, and recession risks."

It is worth noting that Goldman Sachs has issued bullish reports on gold multiple times this year, with analysts from Goldman Sachs previously pointing out that gold is the preferred risk hedge tool, making it the most likely candidate for recent price increases, while other commodities are "more selective and lack constructiveness".

Goldman Sachs emphasized that since 2022, central banks of emerging market countries such as China have been the driving force behind the structural rise in gold prices. Goldman Sachs estimates that from January to July this year, institutional demand in the London over-the-counter trading market has been strong, with an average annualized gold purchase volume of 730 tons, accounting for approximately 15% of global annual gold production. Thomas stated:

"Central bank purchases in the London over-the-counter trading market have slowed but remain at a high level, driving about two-thirds of the expected rise to $2,900 per ounce in early 2025."

In addition to declining interest rates and strong central bank demand, given the numerous risks in the current market, investors are likely to prioritize gold, such as the upcoming U.S. presidential election, potential war outbreak between Israel and Iran, and the impact of several days of East Coast port strikes on data.

Later on, the U.S. will release the latest non-farm payroll data, with New York Fed President Williams and Chicago Fed President Gülsünbi also planning to speak later.

Kedia added that if the non-farm payroll report shows strength, this will be favorable for the U.S. dollar, and there may be some profit-taking in gold prices. According to the CME Group's FedWatch Tool, traders believe there is a 69% chance of a 25 basis point rate cut by the Fed in November **