Goldman Sachs: Gold's Bull Run Far From Over Despite Recent Weakness

Despite recent weakness, Goldman Sachs remains optimistic about gold's bull run. The firm's global head of metals trading, Tony Kim, describes the current market as an 'elongated pause' rather than the end of the broader bull market.

The US-Iran conflict and uncertainty over Federal Reserve policy under new chair Kevin Warsh have complicated the outlook for gold prices. However, Kim believes that once market uncertainty clears, gold could set records.

Central bank gold purchases have surged since the Russia-Ukraine war, with global mines producing around 3,500 tonnes of gold per year and central banks buying closer to 1,000-1,100 tonnes annually. This has reduced the amount of gold available for other purposes, making it easier for prices to rise.

Kim suggests that investors should build positions gradually rather than trying to identify the exact bottom. He also notes that a smaller quantity of gold is left available for jewellery, ETFs, bars, and physical investment, making it easier for prices to rise.