Goldman Sachs Group boosted its gold forecast to $1,800 an ounce as the coronavirus, depressed real rates and increased focus on the US election continue to drive demand for the metal as a haven. The bank raised its 12-month projection by $200, and said “in the event that the virus effect spreads to Q2, we could see gold top $1800/oz already on a 3-month basis.”
The bank has also recently warned some clients to skip a New York conference over fears of the virus.
Goldman’s stock has dropped 20% in the last week ($250 – $198) in what has been one of the worst crashes in stock market history, with broad sell offs across the board in indexes and single stock equities.
As the market correction deepens, central banks are gearing up to move into more aggressive quantitative easing with up to two rate cuts expected by the Fed by June.
There is currently a split between analysts advocating to buy the dip and those advocating to hold back. Owing to the market being at the end of the market cycle and the black swan not going away anytime soon, the latter might have a better point but no doubt the former will be saved by QE (in the short-term).
No doubt some readers might be wondering why DisruptionBanking is talking about such an old fashioned asset such as gold but one of our first interviews was with the fintech Glint and with the wider flight to safe havens the yellow metal has become rather fashionable of late.
However, we must also remember that BTC has just recently passed it’s own ‘golden’ moment recently, with the 50 and 200 SMAs crossing each other to form a ‘golden cross’.