• 2 minutes California to ban gasoline for lawn mowers, chain saws, leaf blowers, off road equipment, etc.
  • 6 minutes China and India are both needing more coal and prices are now extremely high. They need maximum fossil fuel.
  • 11 minutes Europeans and Americans are beginning to see the results of depending on renewables.
  • 24 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 days The Climate Scare Stories Began With Far Left Ideology Per GreenPeace Co-Founder
  • 5 hours NordStream2
  • 1 day Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 2 hours US intel warns China could dominate advanced technologies By NOMAAN MERCHANT October 22, 2021
  • 1 day Biden Sets Target Of 50% EV Share In U.S. Car Sales In 2030
  • 3 days Putin and Xi have decided not to attend the Climate Summit in Glasgow
  • 3 days Storage of gas cylinders
  • 3 days "The Hidden Story About California's Container Ship Backlog" via Corbett Report
A Global Oil Shortage Is Inevitable

A Global Oil Shortage Is Inevitable

Oil companies are under increasing…

MINING.com

MINING.com

MINING.com is a web-based global mining publication focusing on news and commentary about mining and mineral exploration. The site is a one-stop-shop for mining industry…

More Info

Goldman Sets $2,300 Price Target For Gold In 2021

Gold prices are expected to break out of the current narrow trading range and soar through 2021 as the coronavirus recession gives way to higher inflation, analysts at Goldman Sachs say.

Bullion has hovered around $1,900/oz over the past few weeks after its summer rally to record highs fizzled out. While uncertainty surrounding the U.S. election fueled a brief rally, positive news of covid-19 vaccine trials has pushed investors out of safe havens and into riskier assets.

Spot gold declined 0.3% to $1,873.08/oz by 1:50 p.m. ET Wednesday. U.S. gold futures were down 0.6% to $1,872.60/oz in New York.

In the near term, gold doesn’t have a clear catalyst to lift or drag on prices, analysts Mikhail Sprogis and Jeffrey Currie say. Yet, the precious metal is poised to break out in 2021 as inflation concerns take center stage, they add.

Goldman has set a $2,300/oz price target for gold, which equates to a 22% rally from current levels over the next 12 months and another all-time high.

Long-term inflation

Gold prices typically fall when interest rates climb, but the 2008 recession showed the market focusing more on short-term rates. Even as longer-term rates moved higher, gold rose in the wake of the financial crisis as concerns around policy-fueled inflation lifted demand, according to Goldman.

The metal will follow the same path next year, Goldman analysts say. The Federal Reserve has indicated it will allow for a temporary overshoot of its 2% inflation target after a prolonged bout of weak price growth. Goldman’s economics team sees inflation rising to 3% before weakening through year-end. Related: Oil Prices Under Pressure As Oil And Gasoline Inventories Build

“This may well lead to market participant concerns over the long-term inflation rate and more inflows to gold in order to hedge it,” the bank’s analysts say.

Expectations for a weaker dollar also support a disconnect between gold prices and long-term rates, the team adds.

Analysts at HSBC echoed the same sentiment, stating that the long-term outlook for gold remains positive, despite further downward pressure in the immediate term due to the vaccine breakthroughs.

“The broader economic climate (such as high debt, likely defaults, and vulnerable asset price declines) is still gold-friendly. The risk now is whether the pandemic worsens and how quickly a vaccine can be made available – assuming it does provide protection from covid-19,” HSBC analysts say.

“The fiscal and monetary response to the pandemic globally will remain highly accommodative. A Democratic administration with the commensurate likelihood of bigger fiscal stimulus packages to come will likely buoy gold.”

“All this should continue to provide gold with a reason to go higher in the medium to longer-term.”

By Mining.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News