Goldman: Structurally Resilient

Goldman Sachs write “gold prices have remained in consolidation mode in the aftermath of this week's FOMC meeting, which removed the tightening bias from the post-meeting statement while Fed Chair Powell signalled that a March cut "is probably not the most likely case". As a result, alongside expectations for strong US growth, our economists have pushed back their forecast of the first cut from March to May, but continue to expect 5 cuts in 2024 and 3 more in 2025.”

• “While this development is likely to extend the current phase of range-bound gold prices, with short-term moves tied to data potentially influencing Fed decision-making, we believe downside to the price will be limited by robust support from other channels.”
• “Physical demand for gold remaining elevated due to resilient central bank purchases and strong EM retail demand serve as key supportive factors for gold prices.”
• “Indeed, we expect central bank purchases will remain strong on the back of reserve diversification by EM countries and elevated geopolitical tensions. In this context, we remain bullish on gold with our 12-month target at $2,175/toz, implying a 6% return from the spot.”