Goldman Sachs Confirms Bullish Outlook on Gold Prices Amid Fed Rate Cut Speculation
Gold prices surged to a record high of $2,589.6 an ounce on Monday, driven by a weaker dollar and expectations of a significant rate cut by the U.S. Federal Reserve. Goldman Sachs reaffirmed its positive stance on gold, pointing to strong central bank demand and the upcoming Fed policy meeting.
The markets are currently anticipating a potential interest rate cut of either 25 or 50 basis points at the Fed's meeting on September 17-18. Despite some short-term downside risks, Goldman Sachs maintains a long gold trading recommendation with a price target of $2,700 per ounce by early 2025.
The investment bank highlighted the impact of central bank demand and interest rate changes on gold prices. It also noted the increasing popularity of exchange-traded funds backed by physical gold as the Fed's policy rate declines.
In summary, the current market conditions suggest a favorable environment for gold investors, with potential for further price appreciation in the medium to long term. Investors should consider diversifying their portfolios with gold assets to hedge against economic uncertainties and benefit from potential price gains in the future.