Goldman Sachs has released its latest research report, adopting a dual-track approach to the gold market described as structurally bullish but tactically cautious. While the bank reiterated its year-end gold price target of US$5,400 per ounce, it also issued a clear warning that gold faces significant near-term downward pressure.
According to Goldman Sachs' analysis, although much of the previously accumulated gold long positions and outstanding call options have largely been absorbed by the market, gold prices still appear quite vulnerable under current conditions. The analysts warned that the short-term trend for gold remains tilted to the downside. Should the situation in the Strait of Hormuz remain turbulent and bond or equity markets weaken further, gold could face a fresh wave of selling pressure.
Under Goldman's baseline scenario, the bank does not expect further net selling of gold by the private sector, nor does it anticipate additional buying beyond the modest support expected from Federal Reserve interest rate cuts.
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