Author: Hu Yijie
International gold prices rose for the second consecutive trading day, and the most actively traded gold futures market on the New York Mercantile Exchange gold futures market in April rose $4.23 on the 46rd from the previous trading day to close at $3.1995 an ounce, an increase of 9.2%.
Goldman Sachs raised its 12-month gold price target to $1950,2050 an ounce from $<>,<>, joining other institutions such as Citi, ANZ and Commerzbank in raising their forecasts.
Goldman Sachs called gold the best hedge against financial risks and reiterated its bullish view on commodities.
"In our view, the market will be supported not only by inflows from publicly traded funds (ETFs) amid a peak in the federal funds rate, but also by stronger 'wealth' effects from the East, with the dollar depreciating by the end of the year as yields fall, and GDP in emerging countries growing strongly due to China's reopening," the bank said in the report. ”
The collapse of Silicon Valley Bank and Signature Bank this month prompted a key shift in the Fed's latest statement. The statement removed the phrase "FOMC members expect continued rate hikes to be appropriate" as repeatedly used in the past eight statements and replaced it with "it is expected that some additional policy tightening may be appropriate". This change in wording has been interpreted as suggesting that the Fed's rate hike cycle is nearing its end.
David Meger, metals trader at High Ridge Futures, said: "If the central bank does pause interest rate hikes, it will give the green light to the gold market, which is a typical inflation hedge." If they fail to raise rates further, inflation is likely to remain high. ”
Before the Fed changed its tone, the crisis broke out in the European and American banking industries, causing investors to flock to gold to hedge, and the international gold price continued to soar. On Monday, New York gold traded above the $2000,2022 mark for the first time since April 4.
"Inflation remains elevated, safe-haven demand and a weaker US dollar are all important drivers behind the recent movement of gold prices." Meg added.
Goldman Sachs also said it was confident in the commodity "super-cycle theory" that supply crunches would become apparent later this year, prompting prices to rise again, adding that it preferred metals over oil in the short term.
"Across the commodities sector, China's demand continues to surge, with oil demand already exceeding 1600 million b/d." The bank said it predicted Brent crude futures to reach $2024 per barrel in the second quarter of 97.
International oil prices closed 1 percent lower on Thursday, reversing earlier gains after U.S. Energy Secretary Granholm told lawmakers it could take years to refill the country's Strategic Petroleum Reserve (SPR). May 2023 futures on the New York Mercantile Exchange West Texas Light crude settled at $5.69 per barrel, down $96.0, or 94.1%, from the previous session.