Analyst Mikhail Sprogis of Goldman Sachs Bank is optimistic about the future prospects for gold. This can be seen from the analytical forecast of his department for commodities, which says that the value of the precious metal is recovering to the level of $ 2,000 an ounce. The current review of the American bank once again confirms the previously announced target for the rate of the yellow precious metal.
The main factors of support for the price of gold will be worries about rising inflation, as well as the recent decline in the yield of US government bonds.
“Over the past few months, gold has been highly correlated with the 'fear of inflation' factor. However, gold prices corrected sharply after the Fed's unexpected announcement of a reduction in inflation target, which our economists interpret as a more retrospective interpretation of the Fed's average inflation target, ”Kitco News reported, citing Sprogis. Inflation and the associated risks are no longer the focus of investors' investment decisions.
“In our baseline scenario, when the global economic recovery continues and inflation remains low, we expect this discount in real interest rates to persist and we see modest upside potential for gold, as real interest rates rise slightly and welfare in developing countries will recover at a modest pace, ”says Sprogis.
He went on to say: “In a scenario where the global economic recovery does not go as expected, or inflation begins to significantly exceed expectations, we see significant upside potential for gold, given the undervaluation and low investment share by investors. Therefore, we believe that gold can be a good strategic buy for portfolio managers looking to hedge against residual macro volatility risks. ”
According to Business Insider, the American bank Goldman Sachs sees the potential for the price of gold to rise even up to $ 2,500 per troy ounce.
Kitco News emphasizes in its article that not all analysts at Goldman Sachs share a positive outlook for gold. For example, the commodities department published a positive scenario, while other colleagues believe that gold - especially compared to equities - does not provide sufficient capital protection against inflation in the long term.
This is most likely due to the fact that the first forecast was about private investors who do not need to pay the cost of storing precious metals. Colleagues from the asset management department felt that large investors in physical precious metals would have to pay for warehouse storage and insurance. That is why there was such a disagreement in the forecasts for gold.