Goldman Sachs has consistently predicted the price of gold is going lower.
So the broker raising its price target on the precious metal this week raised more than a few eyebrows.
True, the heavyweight US broker does not much like the metal much even so.
“The risk-off environment that contributed to gold’s outperformance at the beginning of this year is less likely to repeat in the near future,” it said in a report.
But after a 20% rise since December and busting through the broker’s short position stop-loss, some reassessment was on the cards.
The New York-based bank says it now expects gold to trade at an average $1,200 per ounce in three months (up from its previous forecast of $1,100), $1,180 in six months ($1,050), and then $1,150 in 12 months’ time ($1,000).
Even with these tweaks and given that gold is currently trading around $1,270, Goldman’s outlook is quite bearish.
Chinese growth stabilising, the improving oil price and a recurring theme for the bank of a stronger dollar underpin its view.
But whereas a year ago Goldman would have been in the majority with its stance, now it’s quite the opposite.
According to the French bank BNP Paribas, gold could hit the dizzy heights of US$1,400 an ounce over the coming 12 months, but it is only one a number of previously bearish commentators that have switched sides so to speak.
Then, of course, there are the gold bugs whose love of the metal never seems to dim.
Billionaire hedge fund manager Paul Singer has long been a flag-waver for the metal, stating way back in 2013 that gold may be “rediscovered”, an assertion he says was vindicated with the recent uptick in gold prices.
He believes this isn’t the peak for the gold, either, and said the jump in price during the first quarter of 2016 “could represent something closer to the beginning than the end.”
Singer’s positivity on gold stems from his negativity towards the central banks.
In a letter to his clients recently, Singer said that if confidence in central bankers’ “judgement continues to weaken, the effect on gold could be very powerful.”
But the views of Singer and BNP Paribas seem quite conservative compared to the prediction of American financial commentator Jim Rickard.
In his latest book, called ‘The New Case for Gold’, Rickard says that US$10,000 per ounce would be a reasonable price for the metal.
He thinks it could even go higher, too, should the complex world financial system fail and need reform.
Away from his apocalyptic worries, Rickard’s love for gold is simple: it stands him in good stead come rain or shine.
“It is one of the few assets that perform well in both inflation and deflation. That is the best kind of insurance,” he says.
Shortly before UK market close on Friday, gold was trading US$1,265.76/oz.