Daan Struyven, Goldman Sachs co-head of worldwide commodities analysis, says that international financial uncertainty is elevating fears of a weakening US greenback whereas driving larger demand for gold.
In a brand new interview on CNBC’s Squawk Field, Struyven says that many traders and central banks are on a gold shopping for spree as they appear to the safe-haven asset amid US President Donald Trump’s tariff insurance policies.
“The broader driver right here is uncertainty and dangers, draw back dangers to the US and the worldwide financial outlook, and that’s pushing down among the extra procyclical commodities carefully tied to US development, reminiscent of oil, however it’s supporting gold. We’ve got seen very important will increase in funding demand for gold, and we’re seeing very fast shopping for from central banks for gold as nicely.”
Struyven says gold might soar to as excessive as $3,300 this 12 months amid investor fears the US greenback will weaken.
“Our forecast base case for year-end is $3,100 per ounce. However we expect that the chance to this base case and to our $3,100-$3,300 vary are skewed to the upside. It’s fairly outstanding. We’ve got seen a rally regardless of a decline in speculative positioning. So positioning is quite a bit cleaner than earlier than the rally.
And the reason being that traders, ETF (exchange-traded fund) holdings have jumped. They’ve added 100 tons of demand over the past month, and central financial institution shopping for continues to be very robust. In January, central financial institution shopping for was seven instances larger than the pre-2022 common. Central banks internationally are apprehensive that the greenback and Treasury holdings will not be protected.”
Gold is buying and selling for $2,994 per ounce at time of writing.
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