“Bets on Gold,” says the first page of the report produced by Goldman Sachs. Understand the reason for this recommendation.
Gold is a metal with a very characteristic color, which gives it a unique beauty. Because of this, throughout human history, it has been coveted, whether for religious, esoteric, beauty, or economic reasons. And this week, on Tuesday, the Goldman Sachs report said on its first page: “Go for gold.”
This recommendation may have sounded strange to some people, especially since gold contracts are near their historic highs, at a value higher than $2,500. However, in the institution’s view, prices may rise even further.
For example, it is expected that **gold** will reach a value of $2,700 by 2025, based on the current scenario. “It is still our preferred short-term position,” wrote the analysts.
This scenario is not much different from what was seen when the precious metal had its first spark in the rally. In fact, just this year, it has already jumped more than 20%.
Gold Recommendation
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Because of this, analysts reaffirm that gold is still the preferred protection asset against both geopolitical and financial risks that are presented. And the expectation of price increase is mainly due to the continuous purchases being made by Central Banks of emerging countries.
Additionally, there is another factor fueling this gold demand, or rather, the lack of it, from China. This is because the world’s second-largest economy is going through tough times, especially due to the real estate sector. After the Evergrande default three years ago, the country’s government has been seeking alternatives to prevent the crisis from turning into a financial market collapse.
A third factor also influences the gold valuation scenario, namely the potential interest rate cut in the United States, which is expected to happen in the upcoming meetings this month.
Source: Your money
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