Gold price stabilizes after experiencing a sharp decline, Goldman Sachs is optimistic that the gold price will rise to $2700 next year
Gold prices have stabilized after a sharp decline, expected to attract new buyers. Analysts at Goldman Sachs predict that the price of gold will rise to $2,700 per ounce next year, as gold is seen as a safe haven and can hedge against geopolitical shocks and economic downturns. In addition, the loose monetary policy of the Federal Reserve, central bank purchases of gold, and geopolitical tensions in the Middle East also support the rise in gold prices. Currently, the price of gold is relatively stable, at $2,414.39 per ounce
Zhitong Finance APP noticed that on Monday, due to some traders cutting their holdings to meet potential margin requirements, the price of gold stabilized after being dragged down by a global sell-off.
Spot gold plummeted by 3.2% in the previous trading day, marking the largest intraday drop since early June, before rebounding slightly. With stocks and commodities falling, the daily price fluctuations of gold exceeded $90.
Although most Asian stocks rose on Tuesday, the stock market is expected to further fluctuate, with gold expected to attract new buyers. While gold is traditionally seen as a safe haven, during market turmoil, gold prices tend to fall before rebounding.
Goldman Sachs analyst Daan Struyven stated in a report, "Long positions in gold currently provide the largest hedge value in commodities for portfolios," and maintained the view that gold prices will rise to $2,700 per ounce by 2025. They mentioned that gold can hedge geopolitical impacts such as war, trade tariffs, and concerns about U.S. sovereign debt.
After hitting a historical high in July, gold prices have risen by about 17% so far this year, mainly supported by bets on the Federal Reserve shifting to a loose monetary policy. Lower borrowing costs benefit gold as it does not yield interest.
Due to concerns about the U.S. economy entering a recession, derivative traders expect the Federal Reserve to cut interest rates at least five times by 2024, with a 16% chance of an emergency rate cut before the next meeting on September 18.
Increased purchases by central banks and Asian consumers have also driven up gold prices. Escalating geopolitical tensions in the Middle East (Israel is preparing to respond to attacks from Iran and local militias) have also supported the price of gold.
At the time of writing, the price of spot gold remained relatively stable, at $2,414.39 per ounce. Silver prices rose by 0.7% after falling by 4.5%, while platinum and palladium prices increased