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Goldman Lift Their Gold & Silver Calls, Again


Goldman Sachs note that "the recent surge in gold has substantially
outpaced the rise in real rates & USD alternatives. We believe this
disconnect is being driven by a potential shift in the US Fed towards an
inflationary bias against a backdrop of rising geopolitical tensions,
elevated US domestic political & social uncertainty, and a growing 2nd
wave of covid-19. Combined with a record level of debt accumulation by
the US gov't, real concerns around the longevity of the USD as a reserve
currency have emerged. We have long maintained gold is the currency of
last resort, particularly in an environment like the current one where gov'ts
are debasing their fiat currencies and pushing real interest rates to all-
time lows. With more downside expected in US real interest rates, we are
once again reiterating our long gold recommendation from March and are
raising our 12-month gold and silver price forecasts to $2300/toz and
$30/toz respectively from $2000/toz and $22/toz. These forecasts are
consistent with a 5-year TIPs of -200 bp."

MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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