Goldman Sachs targets $2,900 as low rate outlook drives gold demand
Goldman Sachs targets $2,900 as low rate outlook drives gold demand
Global demand dynamics and price movements reveal how gold is transforming as a preferred asset for both institutional and individual investors.
Gold continues a steady climb in 2024, reflecting a strong appeal as both a hedge against inflation and a shield in uncertain times.
Gold futures surged by 0.8% on Tuesday, hovering close to $2,770 per ounce, while spot gold hit a record of just over $2,759. Gold's latest spike is a result of investors seeing lower interest rates on the horizon and increasingly turning to precious metals for stability.
Goldman Sachs is not an exception. The financial institution supports this sentiment and has placed a price target on gold at $2,900 per troy ounce by early 2025.
Silver is also riding the wave, climbing over 37% this year to cross $34 per ounce—a level not seen in over a decade. As Chris Vecchio from Tastylive noted, both metals are in the “early innings of a multiyear shift,” signaling that investors are buckling up for a longer run on precious metals. Lower interest rates tend to make bonds less appealing, funneling more interest towards metals as a safe store of value.
China’s demand landscape and safe haven play
However, not all demand is pointing up. China, the world’s largest gold consumer, saw an 11.18% decline in consumption to 741.7 metric tons over the first three quarters of 2024.Traditional jewelry demand is also down by 27.53% due to the impact of high prices.Interestingly, demand for gold bars and coins (a classic safe-haven asset) jumped by 27.14%, reflecting a shift towards tangible investments amid uncertainty.
For China, safe-haven demand also translated into price highs on the Shanghai Futures Exchange, where the gold contract rose 23.5% this year, hitting a record 630.44 yuan per gram on October 23.
It’s evident gold isn’t just on the rise, it’s evolving as a go-to safe haven for locals as well. Price milestones are emerging, and with global uncertainty and the prospect of a prolonged low-rate environment, investors are watching gold closely.
Gold ETF inflows reach record high $4 billion in October. It stands as a preferred asset in unpredictable equity and rate markets
