Goldman Sachs commodity analysts Jeffrey Currie and Mikhail Sprogis, said that there is still a “strong strategic case for gold,” in its latest report.
Key quotes (via Kitco News)
“In our view, the structural bull market for gold is not over and will resume next year as inflation expectations move higher, the U.S. dollar weakens and E.M. retail demand continues to recover.”
“Near term, however, it may be difficult for gold to generate a meaningful momentum in either a higher or lower direction.”
“Under our economist forecast (assuming our bullish oil forecast) short-term U.S. real rates will average -2.1% over the next five years. Five-year tips yield is currently -1.2%, which implies material downside potential.”
“We believe the bulk of gold purchases which happened this year were made by investors who were more concerned about the real purchasing power of the dollar vs. losses in their equity portfolios,”
“Chinese and Indian gold demand already displays signs of normalization. The Chinese and Indian gold premiums are gradually increasing and are almost back to pre-Covid levels. Biden’s election win and vaccine news should continue to push currencies of E.M. consumers higher as tariff risks are lower, supporting their purchasing power.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.