Goldman says gold prices will go even higher

Yahoo Finance’s Julie Hyman joins Josh Lipton on Asking for a Trend to take a look at gold prices (GC=F) after Goldman Sachs analysts lifted their price target for the precious metal.

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Naomi Buchanan.

Video transcript

For our chart of the day.

We're taking a look at a gold note from Goldman, and it's raising its forecast.

You finance, This is Julie Hyman joins me now with a closer look.

Julie.

Yeah, I'm going to start not on the chart of the day, but just a chart of gold because it has had such an incredible run here up 30% year to date, just under $2700 an ounce.

And guess what?

Goldman says.

It's going to go even higher.

They're looking at $2700 an ounce Uh, for, uh, this year and then $2900 looking just to early 2025.

Why?

Well, they say that people who have been watching gold are looking for a so called secret buyer who's been buying up the gold.

And Goldman Sachs has this sort of what they call their now cast.

Looking at various indicators of who's buying up these, uh, gold, uh, both futures and physical here, and what we're looking at here is the World Gold Council, where they estimate the total purchases and then Goldman Sachs' own estimate of where purchases are on the London over the counter market, both of them matching up pretty closely, Goldman says.

The so called secret buyer, which is not really a secret, are emerging market central banks that have been coming into the market here regularly and making these pretty sizeable purchases of gold.

And even though this number is going down a little bit, Goldman says, it's still enough to support the price continuing to go higher in particular Goldman Sachs.

Is it not just emerging market central banks?

Generally, it's the People's Bank of China in particular.

Now the P BC does report how much gold it is buying regularly.

But Goldman implies that the P BC is under reporting, and again there are now cast.

Their analysis of stuff that's happening in real time indicates that the Chinese central bank is actually buying more gold than it is self reporting.

So again, something else that it says will continue to be supportive of that gold price moving higher here.

Josh, It's been very interesting to see that continuing rally in gold prices even as we see, for example, risk assets move higher, right?

We know US stocks are higher this year, but the gold price has also been getting a boost