Goldman Sachs, a global investment bank (IB), predicted a sharp rise in the price of gold this year. This reflects expectations of a decrease in interest rates despite the uncertainty of U.S. interest rates.
Goldman Sachs predicted on the 18th that the price of gold this year would reach $2300 per ounce.
Previously, Goldman Sachs had twice predicted the price of gold this year to be $2090 and $2180 per ounce. However, as the price of gold surpassed Goldman Sachs’ predictions, setting a record high in December of last year, an upward adjustment became inevitable.
The Federal Reserve (Fed) has pursued a tight fiscal policy over the past year to curb inflation. This has impacted the investment market, and analysts believe it has particularly benefited safe-haven assets like gold.
Everett Millman, a senior market analyst at Gainesville Coins, a well-known U.S. online dealer, analyzed, “Gold is already reflecting a positive rise in price due to expectations that interest rates will fall.”
He continued, “The Fed will likely maintain its current monetary policy more restrictively for a longer period if inflation begins to rise again. However, if the reason for keeping interest rates high is inflation, people will turn to gold again,” he emphasized.
There are negative evaluations of the rise in the gold price. The Wall Street Journal pointed out, “Many people on Wall Street believe that the rise in the gold price can continue, but a clearer signal that the Fed will lower interest rates soon is needed.”
Meanwhile, the Fed will hold a Federal Open Market Committee (FOMC) meeting on the 20th. The market is focused on freezing interest rates, and a full-scale interest rate cut is expected to occur in June or July.
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