Goldman Sachs keeps bullish view on gold prices

Goldman Sachs announced their support for gold as the US continues to see weak growth and renewed euro zone risks. While current prices have slightly pulled back, the case for higher gold prices still remains and they expect gold to continue with higher prices during 2012.

May 10, 2012, 02.25PM IST
The Economic Times

Goldman Sachs reiterated its bullish view on gold prices citing weak US growth and renewed euro zone risks coupled with resilient physical demand.

"Despite this recent pull-back, which has brought into question gold's status as the currency of last resort, we believe that the case for higher gold prices remains in place," Goldman analyst Jeffrey Currie said in a research note dated May 9.

The Wall Street bank kept its six-month and 12-month forecasts for gold of $1,840 per troy-ounce and $1,940 per troy-ounce, respectively.

Spot gold inched up 0.2 per cent to $1,593.41 an ounce on Thursday in Asia, off a four-month low of $1,579.30 hit in the previous session. US gold GCcv1 was little changed at $1,593.60.

"We see risks that gold will likely continue to trade with a lack of conviction and remain well correlated to the broad-based US dollar and the rest of the commodity complex, which under our FX economists' view of a weaker US dollar still suggests higher gold prices," the investment bank said.

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