Two groups of buyers dominate the market
According to the latest report from Goldman Sachs Research (market research and analysis department of Goldman Sachs - USA) led by expert Lina Thomas, world gold prices could reach 4,000 USD/ounce by the middle of next year.
The main reasons come from struttured demand from central banks and policy easing by the Fed, which supports ETF inflows into gold.
Goldman Sachs classifies gold buyers into two main groups. The first is the group of credulous buyers including central banks, ETFs and speculators. This is a stable demand, often buying at any price, based on economic viewpoints or to prevent risks. According to estimates, for every 100 tons of gold purchased net, gold prices will increase by about 1.7%.
The remaining group is chance buyers mainly households in emerging markets who typically only participate when prices are considered reasonable. This group can create a floor when prices fall and put pressure on when prices increase.
According to Goldman Sachs, central banks bought 64 tons of gold in July, down from the forecast of 80 tons/month. However, this trend is in line with seasonal factors, often slowing down in the summer and accelerating from September.
The report highlighted that since Russia's foreign exchange reserves were frozen after the Ukrainian conflict in 2022, central banks in emerging markets have accelerated gold purchases fivefold. This is considered a structural shift in the reserve management strategy, which is difficult to reverse in the short term.
The latest survey by the World Gold Council also shows that 95% of central banks expect global gold reserves to increase in the next 12 months, while 43% said they will directly increase their holdings - the highest level since 2018.
Speculation increases sharply, risks adjust
Goldman Sachs noted that the speculative position on the COMEX exchange is currently leaning towards buyers, at a high level compared to the average since 2014. This shows that market sentiment is very optimistic, but also increases the risk of short-term adjustments because speculative positions tend to return to the average over time.
However, Goldman Sachs assesses the possibility of gold surpassing the $4,000/ounce mark higher than missing this target.
In its September 26 report, Goldman Sachs recommended that investors diversify their portfolios into gold and commodities to prevent market risks. scenarios such as a stagnant economy accompanied by high inflation, or energy supply shocks, often cause stocks and bonds to weaken together, while gold and commodities maintain or increase in value.
Gold surged in the 1970s as confidence in monetary policy declined, or in 2022 as Russian gas supplies to Europe were interrupted, the report cited.
In addition, Goldman Sachs emphasized that the trend of countries using commodities as geopolitical tools will further strengthen the role of diversifying the portfolio of gold and commodities.
