Goldman Sachs Raises Gold Price Target To An All-Time High Of $2,050 Amid Recession Fears

In a report published Wednesday, Goldman Sachs GS commodities analysts Sabine Schels and Jeffrey Currie boosted their gold price prediction to $2,050/oz for the next year, citing high "fear" and growing recession risks.

Gold has risen by more than $150/toz in the last two weeks as a result of stress on the financial system. "Fear is the key medium to short-term driver for gold", even more than real rates, according to the experts. 

Gold is a safe haven asset during times of rising currency debasement risks, sovereign balance sheet risks, geopolitical risk and other market tail risks. 

The current catalysts making the bullish case for the precious metal are the banking and funding stress and the rising probabilities of a U.S. recession next year. 

Goldman anticipates gold ETF investment to grow in parallel with increasing recession risk, a pattern that may have begun last week with strong inflows into gold-backed ETFs.

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SPDR Gold Trust ETF Bullish Momentum Continues As Inflows Persist

The SPDR Gold Trust ETF GLD, a gold-backed ETF that invests in physical metal bars and is managed by World Gold Trust Services, LLC., traded at $184.6 per share on Thursday's open, breaking above monthly highs. 

The largest gold ETF has risen 8.7% over the past month, posting the strongest monthly performance since July 2020. 

GLD has seen ongoing inflows as investors rushed to gold on the back of the sharp drop in U.S. Treasury yields and increasing economic uncertainties. GLD has recorded $1.3 billion of inflows since the start of the banking crisis.

Read more: Almost Done: BofA, Goldman Sachs Expect Fed Hiking Cycle To End By Midyear Amid Banking Credit Crunch

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