Goldman Sachs, the major investment bank, on its part, is convinced that the gold price will gain 20% to surpass $2,300 by the end of 2022. On July 31, gold futures hit record highs of more than $2,000 per ounce but Goldman is convinced that the precious metal still has a long way to go.
Based on a Bloomberg report, the bank believes that the gold price will rise to $2,300 in the coming 12 months. That is a revised forecast that was originally set at $2,000. The revision happened due to concerns over the US dollar’s standing.
Goldman Sachs analysts said on July 28 that a record level of debt accumulation form the US government coupled with real concerns around the longevity of the US dollar as a reserve currency had significantly affected the price of the haven asset. For now, gold is priced at $1,975 per ounce.
What Triggered Gold May Also Help Bitcoin
The measures adopted by the US government to mitigate the economic effect caused by the health crisis may easily lead to a debt rise through currency debasement as explained by Goldman. The bank states that these conditions may increase the prices of gold and silver.
Nevertheless, most of the other alternatives to fiat currency would also appear more attractive to investors while the US dollar gradually loses its value as a reserve currency. Cryptovibes reported that Bitcoin can be a better hedge against inflation that gold. Since the flash crash in March, the crypto has recorded a stronger negative correlation with the US dollar than gold.