Gold Market Update - Goldman Sachs Sees Gold At $1,000/oz In 3 Months

With stock and bond markets under renewed pressure, gold remains very well bid and is up some 0.6% in early trading in Europe.

Goldman Sachs (GS) have increased their forecast for gold from the previously very low $700/oz to over $1,000/oz in the next three months due to “rising investor demand for safe haven assets”.

“The gold price rally has been driven by surging demand for gold in all forms: physical gold, exchange-traded funds (ETFs), and futures contracts as investors seek ‘a safe store of value amid the financial distress and inflation risks,” it said in a report.

It also noted that a strong relationship between the price of gold in U.S. dollars and the exchange rate of the dollar against other currencies has begun to break down. Meaning that gold was now surging in all currencies as central bankers debase currencies internationally and try to inflate our way out of the deepening crisis.

Gordon Brown became one of the first leaders to mention the ‘Depression’ word yesterday and unfortunately the terrible speed of the declines in economic growth in all countries internationally means that there is an increasing possibility of the global depression.

At the very least a severe global recession is upon us and thus gold will outperform other asset classes in the coming months as it did in the Weimar hyperinflationary depression and the deflationary Great Depression in the 1930’s (Roosevelt revalued gold by some 70% and devalued the dollar by some 70%, from $20/oz to $35/oz).

Subscribe by RSS Subscribe by Email