Goldman Sachs Warns that Gold Will Reach $2,300 in 2021

Goldman Sachs expects gold to jump nearly 20% from its record level to hit $2,300 in the next 12 months. The cause, according to one of the largest investment and securities banking groups in the world, is growing concerns about the global position of the US dollar as a reserve currency. 

Goldman Sachs analysts continue to believe that gold has plenty of room to operate in the context of mounting geopolitical tensions, high political and social uncertainty in the United States, and a second growing wave of the global Covid-19 pandemic.

With an expected further downside in US real interest rates, the bank analysts raise their 12-month gold and silver price forecast to $2,300 an ounce.

Combined with a record level of debt accumulation by the United States government, real concerns have begun to emerge about the longevity of the US dollar as a reserve currency, state analysts. They marked a 15% increase in the gold price forecast for 2021 from previous forecasts of $2,000 an ounce.

The bank raised its silver forecast by 36%

The bank reaffirmed that gold is a currency of last resort. Meanwhile, it has also raised its 12-month silver forecast by 36% to $30 an ounce. Goldman Sachs previous forecast hit $22 an ounce. 

Continuous stimulus flows and measures, taken by policymakers, to combat the economic downturn caused by the pandemic will lead to a significant increase in debt in the future, Goldman said. This in turn will lead to growing inflation, and it will increase precious metal prices.

If central banks can digitally create money, it could easily undermine the fiat money system. It would potentially devalue currencies or even worse could happen. Analysts concluded that gold would look very attractive in this scenario.

Gold prices are near $2.000

Gold prices hit another record on Monday’s trading session. The precious metal prices closed at $1.976.50 an ounce. October gold futures increased $2.20 an ounce to settle at $1,976.10. 

The news in the business world are being bullish for the precious metal. On Sunday, The US President Donald Trump has given TikTok 45 days to trade its US operations. According to Trump, the Chinese company is a national security threat to the US Microsoft. This move intensified the tensions between the US and China. The strains are supporting the safe-haven gold and silver markets