Gold prices will climb to $1,600 per ounce over the next year, Wall Street bank Goldman Sachs projects. It says that central banks are consuming a fifth of the global supply of the yellow metal.
“De-dollarization in central banks – demand from central banks for gold is biggest since the Nixon era, eating up 20 percent of global supply,” the head of global commodities research at Goldman, Jeff Currie, told Bloomberg. “I am going to like gold better than bonds because the bonds won’t reflect that de-dollarization.”
Citing “fear-driven demand” for the precious metal, Goldman analysts said last week that investors should diversify their long-term bond holdings with gold.
“Going long-term depends on what is going to happen to global growth. The further out you go, the higher the probability that the US is going to hit a recession. We have $1,600 holding out through 2021,” Goldman Sachs analyst Mikhail Sprogis told Kitco News. Gold was trading at $1463.30 per ounce on Tuesday.
Sprogis said that central bank gold demand will be driven by demand from Russia, Turkey, China, and other countries, including Poland.
Statistics showed that hedge funds and other large speculators boosted their bullish bets on the precious metal by 8.9 percent in the week ended December 3. That is the biggest gain since late September.__RT.com