Goldman Sachs recently upped its projection that Gold would hit $1,575 within 3 months and $1,600 within 6.
The catalyst for Gold springing back to life seems to be the escalating trade war with China as Trump recently announced a 10% tariff on the remaining $300 billion worth of Chinese imports, effective September 1st.
Analysts at Goldman summed up the reasoning for their increased projections as follows, “With the U.S. and China taking a harder line on trade, our economists no longer expect a trade deal before the 2020 presidential election.”
“Previously, China opted for stability and defended its currency in order to facilitate the ongoing trade negotiations in the background. Now, FX appears to be playing an increasingly central role in the trade tensions.”
As China allowed the Yuan to depreciate below key levels against the U.S. dollar Trump blasted them as currency manipulators which according to Goldman, “should be bullish for Gold” as well.
Goldman has also doubled their 2019 forecast for ETF demand for Gold from 300 to 600 tonnes.