Gold prices expected to jump to $3150 per troy ounce, 19% over current levels: Goldman Sachs
Goldman Sachs expects gold prices to jump to $3150 per troy ounce, an increase of 19 per cent from the current level, if concerns over US fiscal sustainability grow. The yellow metal acts as a good hedge against inflation and rising geopolitical tension. Gold was trading at $2647 per troy ounce on Tuesday in the international market and at Rs 76,470per 10 gm in the domestic market.
Rising fears of inflation and fiscal risks could drive speculative positioning and ETF flows higher, while US debt sustainability concerns may push central banks, especially those holding large US Treasury reserves, to buy more gold.
A Goldman Sachs report on commodity outlook for 2025 released today says that the unusually wide range of potential US policy shifts in 2025 strengthens the diversifying role of commodities in portfolios. In particular, long positions in gold and oil positions can act as critical inflation and geopolitical hedges in tail scenarios, including tariff escalation, geopolitical oil supply disruptions, and debt fears.
Goldman Sachs says “The key upside risks to inflation under the second Trump administration on the supply side are much higher tariffs (our economists see a 40% chance of a 10% across-the-board tariffs on all $3.1tn of US imports), deportations, and lower Iran oil supply, which could weigh on equity and in some scenarios bond returns.”
The key upside risks to inflation on the demand side are larger tax cuts, higher defence spending, and stronger attempts to influence Fed policy, which could all
