Goldman Sachs remained bullish on gold for the long haul due to potential of a “shock to the global economy” following the COVID-19 outbreak. Nevertheless, it trimmed the forecast for the next half year as a result of potentially less central-bank buying.
In particular, Goldman said, the sharp nosedive in crude-oil prices this month could mean Russia has less available cash to keep buying gold for its reserves.
Meanwhile, analysts said the expected damage to the global economy could be severe enough to wipe out the expected supply/demand deficit in palladium, sending prices lower.
Goldman analysts said “we maintain our bullish outlook on gold, as the larger-than-expected shock to the global economy will likely lead to greater risk aversion.” Thus, while the bank trimmed its three- and six-month forecasts by $100 each to $1,600 and $1,650 an ounce, analysts left their 12-month outlook at $1,800.
Read the full article here