{"id":2212,"date":"2024-11-18T19:47:16","date_gmt":"2024-11-18T19:47:16","guid":{"rendered":"https:\/\/friscotimes.org\/?p=2212"},"modified":"2024-11-19T10:14:04","modified_gmt":"2024-11-19T10:14:04","slug":"gold-price-could-shoot-to-all-time-high-under-trump-goldman-sachs-predicts","status":"publish","type":"post","link":"https:\/\/friscotimes.org\/?p=2212","title":{"rendered":"Gold price could shoot to all-time high under Trump, Goldman Sachs predicts"},"content":{"rendered":"\n

Escalating trade tensions and concerns over the sustainability of the U.S. fiscal balance sheet could help ignite a fire under the price of gold in the coming year, according to a study by Goldman Sachs.\u00a0<\/p>\n

\n

The precious metal hit an intraday all-time high of $2,790 of at the end of this October<\/a>, when the World Gold Council warned in its quarterly demand trend report that the market had succumbed to FOMO<\/a>\u2014or <\/em>fear of missing out. It has since pulled back over the course of November, and is trading at around $2,600 currently.<\/p>\n

\u201cThe gold price consolidation following the orderly U.S. election\u2014flushing speculative positioning from near all-time highs\u2014provides an attractive entry point to buy gold,\u201d it said in a research note on the 2025 outlook for commodities published on Sunday.\u00a0<\/p>\n

Goldman Sachs expects robust underlying demand for bullion among central banks looking to\u00a0permanently diversify their reserves\u00a0away from their current allocation of U.S. dollars after the Biden administration froze Russian assets as punishment for the invasion of Ukraine.\u00a0Some banks see gold as a more politically neutral asset that can\u2019t be subject to freezes by countries because of geopolitical risk. <\/p>\n

Exchange-traded funds will also bid up the price, Goldman predicted, due to cyclical inflows from investors seeking to hedge their portfolios against the forecast effect of the Federal Reserve lowering interest rates to between 3.25% and 3.5% next year.\u00a0<\/p>\n

Bullion could rise to $3,150 an ounce by end of 2025 <\/h2>\n

As a result, gold bullion ought to be trading at $3,000 per ounce by the end of next year, the Wall Street investment bank believes.\u00a0<\/p>\n

But now the bank estimates geopolitical risks could prompt speculators, who were active up until very recently, to return as Trump\u2019s transition team continues to shock markets with its unorthodox policies and Cabinet appointments.\u00a0<\/p>\n

This could lift gold to $3,150 an ounce as speculators begin to take bets on whether the U.S. economy will saddle its trading partners with new punitive tariffs just as the country struggles increasingly to shoulder its immense fiscal deficits.<\/p>\n

Gold\u2019s vote of no confidence in paper currencies backed by government fiat <\/h2>\n

The $1.83 trillion budget shortfall from this past fiscal year through September had to be met with additional borrowing, which can be inflationary should the Fed be forced to purchase more U.S. Treasury notes with freshy printed dollars.<\/p>\n

\u201cRising fears of inflation and fiscal risks could drive speculative positioning and ETF flows higher,\u201d it wrote, \u201cwhile U.S. debt sustainability concerns may push central banks, especially those holding large U.S. Treasury reserves, to buy more gold.\u201d<\/p>\n

While idiosyncratic aspects can drive gold buying\u2014including central banks actively managing their allocation of gold reserves or demand in key jewelry markets like India\u2014a broad sustained rise in the gold price during periods of uncertainty is often viewed as a vote of no confidence in the U.S. dollar as a store of value, as well as and other paper currencies backed solely by government fiat.<\/p>\n

Trump\u2019s tariffs could cost the average American household $2,600 a year<\/h2>\n

This concern has gathered steam amid the widespread concern that Trump\u2019s tenure could put upward pressure on consumer prices. The President-elect already has a fondness for slapping tariffs on imported goods like steel\u2014if necessary by relying on legal arguments citing a threat to national security in order to impose them unilaterally via executive order.<\/p>\n

\u201cThe key upside risks to inflation under the second Trump administration on the supply side are much higher tariffs,\u201d Goldman wrote.<\/p>\n

For example, Trump has spoken about setting tariffs across the board on every good brought into the market as high as 20%, with a special 60% tariff on Chinese goods. The Peterson Institute for International Economics\u00a0estimates<\/a>\u00a0this could drive the average annual spend up by $2,600 for U.S. households.<\/p>\n

Federal Reserve\u2019s independence to set policy under attack<\/h2>\n

Governments unhappy with this would have a difficulty as the World Trade Organization\u2019s\u00a0dispute settlement tribunal<\/a>, the Appellate Body, has been dormant ever since\u00a0December 2019<\/a>, when the U.S. first began vetoing new appointments under Trump.<\/p>\n

Just as worrying has been his insistence that the White House gain a direct say on monetary policy in addition to fiscal policy, de facto\u00a0ending the Federal Reserve\u2019s political independence. In countries where this barrier has been breached, like Turkey, it can lead to\u00a0spiraling inflation.<\/p>\n

Gold has subsequently been on a tear, with the cost of a standard 400-ounce gold bar recently hitting\u00a0$1 million<\/a>\u00a0each.<\/p>\n<\/div>\n

How many degrees of separation are you from the globe’s most powerful business leaders? <\/b>Explore who made our brand-new list of the 100 Most Powerful People in Business. Plus, learn about the metrics we used to make it.<\/div>\n\n","protected":false},"excerpt":{"rendered":"

Escalating trade tensions and concerns over the sustainability of the U.S. fiscal balance sheet could help ignite a fire under the price of gold in the coming year, according to…<\/p>\n","protected":false},"author":114,"featured_media":2213,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[6],"tags":[3055,169,2502,2759,3170,1924,2503,3169,30],"jetpack_publicize_connections":[],"yoast_head":"\nGold price could shoot to all-time high under Trump, Goldman Sachs predicts - Frisco Times<\/title>\n<meta name=\"description\" content=\"Goldman Sachs sees plenty of upside in the price of bullion over the next 13 months amid concerns over U.S. tariffs and debt ahead of Trump taking office.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/friscotimes.org\/?p=2212\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Gold price could shoot to all-time high under Trump, Goldman Sachs predicts - 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