Goldman doubles down on $3,000 an ounce call in 2025
Analyst: Central bank buying remains strong and is bolstered by ETF inflows
Gold passed through $2,700 an ounce Friday morning as prices began to approach all-time highs made before the U.S. election of former President Donald Trump to the White House.
After a volatile November, gold has posted a week of strong gains and, on Friday, traded up 1.25% to $2,703 an ounce.
Samantha Dart, of Goldman Sachs, told Bloomberg that central bank buying has remained strong, and her team of analysts saw little technical reasons for the recent volatility.
Gold prices have recovered quickly in the second-half of November. (Source: TradingView)
She said the recent drop in prices has provided an “attractive entry point for our high-conviction long gold view” amid policy uncertainty.
Central banks push forward
Dart said central banks are continuing to serve as the biggest mover of gold prices, a fact that has held truce since 2022 when Russian financial assets were blocked by Western sanctions in reaction to the February invasion of Ukraine.
“That sparked a lot of concern from a lot of emerging markets, and China in particular, that this might happen to them one day.
Is it a de-dollarization move?
Dart suggested that central banks' moves are not likely to be a concerted effort to bring down the U.S. dollar but instead a move toward diversification.
“We see it as maybe a rebalancing of the way that financial and monetary authorities hold their reserves — just being a little bit more diversified,” she said.
The other movers of price
Aside from emerging market central bank buying, Dart said her team feels gold prices have several other secondary tailwinds helping to boost the precious metal’s performance.
“For the longest time, ETFs were not part of the story. I think the moment the Fed started cutting, then that’s what opens room for ETFs to come in as well. Safe-haven (physical) buying is just the cherry on top.”
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