Gold prices entered the orbit of a decline after Donald Trump’s victory. However, the bright metal began to stabilize over $ 2,600. Investors are now wondering if they will continue the rally of gold. According to the Goldman Sachs Research commodity strategist Lina Thomas, it is possible for gold to rise until 2025. The driving force behind this will be the demand for the Central Bank of the Central Bank.
Even with the US interest rates, gold prices rose!
Since 2022, Lina Thomas says that gold interest rates have increased by 40 %, even while the US interest rates have risen. “This is very strange. Typically, high interest rates make gold less attractive. Because unlike gold bonds, it does not pay interest rates.” says. However, Thomas says that at the beginning of 2022, the US and other Western countries have changed dramatically after the Russian -freezing (and in some cases seizing) to the invasion of Ukraine by Russia. In this context, the strategist makes the following statement for gold prices:
This was a call for a wake up for the worldwide central banks. They began to remove their reserves from the dollar and to turn it into a being that no one could freeze.
Central Bank Purchases support gold!
As a result, Thomas says investors support the gold prices of Central Bank purchases even when looking for higher return than other assets. “We do not see that the demand for the Central Bank is slowing down. With the reduction of interest rates, investors return to gold.” says.
Kriptokoin.comAs you have followed, on November 18, Goldman Sachs Commodity analysts reiterated their views that gold prices would reach $ 3,000 by the end of 2025. Donald Trump’s election victory and the Republican Party’s passing through the Congress triggered some sales and profit purchase in the gold market, while the investment bank gold did not disappear. Analysts underline the following in a note:
While the structural driving force of the prediction is higher demand from the central banks, a conjunctural increase will come from the flow to the stock market investment funds with the deduction of Federal Reserve.
Trump’s policies will be supportive for gold prices!
Gold purchases of the central banks slowed down in the third quarter. However, as analysts, as countries continue to remove their official reserves from the US dollar, they expect the demand to remain stable in the near future. Goldman Sachs also draws attention to the increasing debt of the US government. The Bank says it will probably lead to more central banks to increase gold assets.
Trump’s winning elections created an important wind for gold by raising bond rates and US dollar. Traders and investors are focused on the “American” policies proposed by the elected President, but Goldman Sachs says these policies will be supportive for gold prices until 2025. “Unseen climbing trade tensions, the analysts can revive the speculative positioning under unprecedented climbing,” he says.
