Goldman Sachs Group IncGS
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Goldman Sachs issues bullish gold forecast, potentially boosting its trading and investment banking revenue.
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Goldman Sachs Group IncGoldman Sachs said in a report dated the 21st that surging demand for gold options betting on higher prices could further accelerate the rally and push gold above its year-end forecast of $4,900 an ounce. It said a further recovery in demand from Western investors, combined with continued solid central bank buying, could lift spot gold toward key option strike levels, where dealer hedging could mechanically amplify price moves. The bank attributed gold's climb toward $4,600 an ounce to fading expectations for a September rate hike after the Federal Reserve held policy rates steady in July and employment and inflation data softened. That has revived speculative positioning on the New York Mercantile Exchange and boosted demand for exchange-traded funds, it said. At the same time, Goldman warned that if Fed rate-hike expectations strengthen again, dealers could unwind hedge positions and trigger a sharper-than-usual correction.
Goldman Sachs Group IncGoldman Sachs issues bullish gold forecast, potentially boosting its trading and investment banking revenue.