Goldman Sachs spoke about 4 gold scenarios
in the Goldman Sachs investment bank is forecasted by four scenarios for the development of events for gold. The potential for rising price for precious metal currently significantly exceeds the risks of decrease, according to the bank. Gold prices fell on Wednesday below $ 1630 and they may soon try to break minimums of the end of September only below $ 1620.
“decreasing almost daily over the past two weeks of gold, almost all the conquests of the rally of the end of September erupted. Last week, gold returned to a 200-week sliding average, Giving a signal that the bears still control the long -term trend in the metal, ”said the FXPRO analyst team.
” The gold had a restless year. Dragmetal was torn between risks for economic growth and inflation, as well as higher real rates and strong dollar. In the future, there is also great uncertainty regarding future inflation, economic growth, US rates and the Fed reactions, ”Goldman Sachs notes.
in the bank developed four economic scenarios for Gold prices: two of them falling and two growing, writes RBC.
“Soft landing” (probability of 30%) – a drop in gold prices by 8%, up to $ 1530 per ounce. Such a scenario may become a reality if inflation in the United States will slow down in 2023 and the country will avoid recession. In this case, investors will probably move from assets-refugees, such as gold, to shares. A recession with a significant decrease in bets (probability of 30%) – a jump in gold prices by 35%, up to $ 2250 per ounce. In this scenario, the US economy will slide into a recession, and the Fed will lower the key rate to zero by 2025. Higher inflation, further increase in the Fed’s rate (probability of 20%) – a drop in gold prices by 9%, up to $ 1,500 per ounce. This model involves the continuation of the fighting of the Fed with inflation. At the same time, increased fears about recession will remain. Recession and a limited rate of bets (probability of 20%) – rising prices for gold by 20%, up to $ 2000 per ounce. The script involves severe inflation in the United States, the Fed to 2025 will reduce the rate to 2.5%. Investors against the background of a fall in real rates and fears of recession They will look for shelters in protective assets, including gold.
“Our main conclusion is that the increased risks of recession create a higher potential for gold growth over its decrease,” the Goldman Sachs suggest.
“If this week is closed below the 200-week average, which now takes place near $ 1680, the chances of implementing a bear script will grow sharply. According to historical data, gold fell 18-30% after a 200-week average. This implies the potential for reduction to $ 1350 or up to up to $ 1150, ”warns a FXPRO analyst team.
