Goldman Sachs Sticks to Bullish Gold Outlook Amid Rate Hikes
Goldman Sachs has maintained its bullish gold outlook despite recent rate hikes by the Federal Reserve. The bank's analyst, Lina Thomas, stated that large-scale physical gold purchases by central banks worldwide remain the core pillar supporting prices, while demand for protection against currency debasement is also cited as an upside driver.
The Fed's rate hike has slowed gold's upward momentum but not fully extinguished it. Goldman Sachs kept the door open to an additional rate hike in October and maintained its optimistic stance on the gold market. Thomas advised clients not to rush to trim their gold exposure, citing that the impact of monetary tightening has already been largely reflected in the market.
The biggest reason for Goldman's confidence in higher gold prices is central bank buying. Global central banks are currently purchasing an average of about 91 metric tons of gold per month, more than five times the pre-2022 average of 17 metric tons. China's People's Bank has extended its buying streak to 22 consecutive months through August.