Goldman Sachs Sees Gold Rally Resuming with $4,000 Floor
Gold prices may be down in recent times, but Goldman Sachs' Tony Kim believes it's just a pause rather than the end of the bull market. According to Kim, global head of metals trading at Goldman Sachs, gold will regain momentum once uncertainty around US monetary policy and geopolitical tensions eases.
The price of spot gold fell 2.4% to $4,342.20 an ounce on September 1 due to uncertainty over Federal Reserve policy and the US-Iran conflict. However, Kim remains bullish on gold, citing central-bank accumulation as a key pillar of the market. Annual purchases by central banks have risen from around 400-500 tonnes before the Russia-Ukraine conflict to approximately 1,000-1,100 tonnes currently.
The increased official-sector buying means that a larger share of annual mine supply is being absorbed by central banks, leaving less available for jewellery, ETFs, bars, and other physical investment. Kim believes this could allow relatively modest new investment flows to have a significant impact on prices.