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Goldman Flag Gold Dynamics Surrounding Latest Round Of Russia Sanctions

GOLD

Goldman Sachs note that “on the one hand, gold's unique role as the currency of last resort will likely be apparent if restrictions on Russia's Central Bank accessing its offshore reserves leave it leveraging its large domestic gold stockpiles to continue foreign trade, most likely with China. Yet, on the other hand, the required large sales of gold at below market prices, given the limited appetite outside of China for such trade settlement, would emphasise its potential limited scale in the future, with few other countries able to use gold as such a currency of last resort. Ultimately, the recent escalation with Russia create clear stagflationary risks to the broader economy, driven by higher energy prices, which reinforce our conviction in higher gold prices in coming months and our $2,150/toz price target.”

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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