Gold prices experienced a significant uptick on Monday, marking the most substantial daily gain since August, as Goldman Sachs (GS) reaffirmed its bullish stance on the precious metal. The financial giant suggested that investors should “go for gold,” with a forecast price target set at $3,000 per ounce for the forthcoming year. This prediction comes amid expectations of Federal Reserve rate cuts, increased tariffs promoting gold’s status as an inflation hedge, and consistent demand from central banks.
The price of gold climbed by as much as 2% during the day, pushing past the $2,600 per ounce mark, a recovery from the recent downturn following Donald Trump’s victory in the U.S. presidential election, which had initially bolstered the dollar and put pressure on commodity prices. Despite the metal’s 6% drop from its record high last month and the dollar’s ascent to a two-year peak, Goldman Sachs views the current market dynamics as an “attractive entry point to buy gold.”
Bloomberg Television featured Bank of America’s commodity strategist Francisco Blanch, who echoed Goldman’s sentiment but added a note of caution. Blanch predicts gold could indeed reach $3,000 an ounce by next year, yet he suggests there might be a temporary drop to $2,500 if U.S. inflationary pressures do not align with the Federal Reserve’s anticipated rate-cutting strategy. “Gold was pricing in at a pretty steep rate cut,” Blanch noted, indicating that any deviation from this path could lead to volatility.
Recent statements from Federal Reserve officials suggest a continued commitment to easing monetary policy. Chicago Fed President Austan Goolsbee indicated that lower rates are expected over the next 12 to 18 months, contingent on inflation moving towards the Fed’s 2% target. Similarly, Susan Collins from the Boston Fed hinted that a rate cut might still be on the agenda for December.
Price Action: At last check, gold was trading at approximately $2,615.30 per ounce. This reflects a recent increase of about 1.76% from previous trading sessions, with a day low of $2,568.50 and a day high of $2,619.50.
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