Latest news with #LinaThomas
Forbes
25-05-2025
- Business
- Forbes
Gold To Top Bitcoin And Silver On Way To $4K Per Oz, Says Goldman Sachs
Standard gold bars for international trade weigh 400 ounces, worth about $1.3 million. Goldman Sachs sees gold as a far better hedge against a collapsing dollar than bitcoin. Over the past few decades, when U.S. interest rates rose, investors would tend to sell gold and buy U.S. Treasuries, seeking higher yields. But that long term relationship broke down in February 2022, when western financial authorities moved to freeze Russia's central bank assets upon President Vladimir Putin's invasion of Ukraine. This was a wake up call, says Lina Thomas, commodity strategist at Goldman Sachs. Investors hold Treasuries or Euros because they are risk free, but if those assets can be frozen or confiscated by foreign politicians 'then we have a problem.' According to Goldman's analysis, Russia was careful to repatriate its gold reserves held abroad. But freezing assets is not just a problem for Russia. It damages the global system when you put in sanctions, says Thomas (speaking on a webinar hosted by energy investing consultancy Veriten). With little faith among investors that the U.S. will be able to rein in trillion-dollar deficits, Treasury bonds are not the safe haven they used to be, so other international central bankers have decided to add to their gold piles as well. Before 2022, central bank purchases were 17 tons per month, says Thomas. Since the Ukraine war they have grown to an average of 22 tons per month, but a remarkable 94 tons per month year-to-date. China (the biggest gold mining country, which restricts exports) aims to grow gold holdings to 20% of reserves. Russia, the no. 2 miner and biggest exporter, has been happy to sell into the ongoing gold frenzy, though much of their supply is now routed through the likes of formerly non-gold-exporting Armenia and Kazakhstan. The central bank gold buying binge should continue for at least another two years. That's enough demand, figures Goldman, to drive the price up to $4,000 an ounce, a roughly 30% rise from a current $3,400. Many central banks store their gold in Switzerland, which has vast vaulting capabilities. As the gold prices keeps rising, it becomes cheaper to store. 'You can get to 20% of reserves either by increasing the volume or when the notional value goes up.' Would this trend reverse if peace broke out? Not much, says Thomas, who did her Phd thesis at Harvard on the history of the dollar as safe haven asset. 'Once you cross the Rubicon it's a little bit tricky to come back from that,' she says. Gold allocations are likely to be sticky. It might take 20 years for macro allocators to regain enough trust to sell gold again, says Thomas. And sell for what anyway? Bitcoin? Silver? Oil? Daan Struyven, Goldman's co-head of global commodities research, says the risk-reward analysis favors gold. Both bitcoin and gold are up a lot in the past three years, and the limited supply of each asset 'gives confidence to investors who are worried about runaway inflation that may be caused by aggressively increasing the money supply.' 'Bitcoin is more volatile and sensitive to drawdowns, and more positively correlated with tech equities. Bitcoin and equities both do well when risk sentiment is positive,' says Struyven. So if you want to protect against equity downside risk, 'the lower correlation and lower volatility imply a pretty significant positive allocation to gold,' he says. It's unlikely gold miners will suddenly find big new mines; good reserves have already been depleted, going deeper takes time. Every year miners add roughly 1% to the total gold in circulation. As for oil, Goldman sees West Texas Intermediate falling to the low $50s/bbl by mid 2026 as supply growth outpaces sluggish demand. Why not buy silver? Thomas gives three reasons: Silver tarnishes over time, it degrades. Gold keeps its form, is far scarcer and because gold is 100 times more valuable pound-for-pound, you can move your billion dollars of buillion in a suitcase instead of the convoy of trailers you'd need for the same value of silver. Also, central banks have no interest in owning silver. It's not recognized as a reserve asset by the IMF and is not present in any modern central bank balance sheet. Silver is more of an industrial metal, and because demand is pro-cyclical (for solar panels, electronics, etc) it is not a good hedge against economic downturn. The gold market is just .5% of the value of the equity market, says Thomas. So even a tiny shift in allocation will have an outsized impact. For central banks the higher the price of gold goes, the easier it becomes to store -- they'll need fewer ounces to build a 20% dollar denominated allocation. Still not sold on the barbarous relic? Just buy blue chip equities. Priced in grams of gold, the S&P 500 is down 30% since 2022 to 58 grams.
News.com.au
27-04-2025
- Business
- News.com.au
Hot Money Monday: Overcooked? Maybe. But gold forecasts suggest this is still a good entry point
Gold hits a speed bump after a turbocharged run
 Miners overcooked, profit-takers hit the eject
 But experts say this is still a "attractive entry point" For more than two weeks, it felt like gold could do no wrong. Prices were punching through record highs, miners were minting it, and investors were high-fiving each other over their gains. But then Wednesday, April 23 rolled in like a rogue wave and absolutely knocked the wind out of the sails. After spot gold briefly kissed a record $US3,500 an ounce on Tuesday, it dropped back to around $US3,338 by Wednesday afternoon. ASX traders took the cue to cash out on their gold stock holdings, and the sell-off was brutal. Gold Spot Price as of April 24 10:00am AEDT: Inflated share prices? But there was more to the bloodbath than just a gold price hiccup. A lot of the ASX miners were already looking pretty inflated after a big couple of weeks. Take Evolution Mining (ASX:EVN) – it has shot up almost 40% in just nine sessions. That kind of run-up doesn't leave much room for error. So when gold wobbled, plenty of investors rushed to lock in gains before the party turned into a hangover. Even solid quarterly results couldn't save them. Genesis Minerals (ASX:GMD), for instance, beat expectations with its March numbers – better grades, better recoveries, all the good stuff – but still got slapped with a downgrade from Macquarie. Genesis was already up by about 80% this year, and Macquarie analysts reckoned it had simply run too far, too fast. Time to cool the jets. Gold-friendly forecasts But zoom out for a second, and the picture is actually looking very gold-friendly. JPMorgan, not exactly known for its bold predictions, now reckons gold could blast past US$4,000/oz by mid-2026. JP is pinning it on rising recession risks, worsening US-China trade tensions, and a global economy that's starting to wobble under the weight of tariffs. Goldman Sachs is also in the gold bull camp. The bank reckons US$3,700 by year-end, and US$4,000 by mid 2026. 'We view the gold price rally as structurally supported and less exposed to sharp near-term liquidation risk,' said Lina Thomas at Goldman. 'Thus, we see current levels as a tactically attractive entry point.' UBS is tossing around similar numbers. If the wheels really fall off the global economy, UBS says US$4,500 isn't off the table. UBS strategist Joni Teves reckons there's still heaps of room for more investors to jump on the gold train, and says not that many have piled in just yet. Why all these bullish predictions? Well, there's a storm brewing, and uncertainty is thick in the air. And when things get hairy, gold tends to shine. Investors are running from other havens like the US dollar and bonds, and they're piling into bullion instead. You've also got central banks snapping up gold, with China leading the charge. China's big insurers are now allowed to stuff 1% of their assets into gold. That alone could add 255 tonnes of demand per year, analysts estimated. And Citi reckons the demand coming out of Asia is just getting started. 'We expect China gold import to rebound strongly over the coming months on the fresh import quota,' said Citi analyst, Kenny Hu. So, what's the play here for investors? Wednesday's carnage – yeah, it stung, no doubt about it. But it also might be opening the door for something bigger. Because while the sell-off shook out the froth, the underlying drivers for gold haven't changed, they've actually gotten stronger. Recession risk, central bank demand, geopolitical tension, it's all pointing in one direction. And that's the thing with gold. It's not always about today. It's about where the world's headed next.
Yahoo
31-03-2025
- Business
- Yahoo
Gold touches new high, on pace for best quarterly performance in nearly 40 years
Gold futures (GC=F) rose to a fresh record on Monday as growing fears of an escalating trade war prompted investors to flock to the safe-haven asset. Futures traded as high as $3,160 an ounce, easing back somewhat throughout the session as stocks faltered. But the yellow metal is still up more than 18% for the first quarter, on pace for its best quarterly performance since 1986. Meanwhile, spot gold rose above $3,127 an ounce ahead of reciprocal tariffs expected to be announced by the Trump administration on Wednesday. Read more: What Trump's tariffs mean for the economy and your wallet In recent months, institutional investors have been shipping elevated amounts of the precious metal to the US as they front-run the threat of levies on metals. Data released last week suggesting sticky inflation and weak consumer sentiment in addition to a move lower in the US dollar index ( have also supported higher commodity prices, while equities on the S&P 500 (^GSPC) and Nasdaq (^IXIC) have plummeted. Wall Street analysts have been upping their price target on the precious metal. Bank of America predicts gold will reach $3,500 per ounce over the coming 18 months under the assumption that investments will increase 10% through more buying from China and central banks, along with investors purchasing physically backed ETFs. A "confluence of factors, mostly driven by the Trump administration's economic policy mix, have pushed investors to increase their allocations to the yellow metal," the analysts wrote last week. JPMorgan analysts posed the question of whether a $4,000 level is possible, given the commodity's rapid price move over the past year. Gold went from $2,500 to $3,000 in 210 days, significantly faster than previous $500 increments, which have taken an average of 1,700 days. JPMorgan analysts asked in a client note on Wednesday, 'With each $1,000 phase taking about two-thirds less time than the previous one, and considering the law of diminishing returns alongside investors' attraction for round numbers, could the $4,000 mark be just around the corner?" Goldman Sachs analysts reiterated their long gold trade recommendation recently, but they recognized two potential events could serve as better entry points for investors. "First, a Russia-Ukraine peace deal would likely trigger speculative selling," wrote Goldman commodities strategist Lina Thomas in a note last Wednesday. However, the analysts noted the freezing of Russian central bank assets following the invasion of Ukraine established "a significant precedent that should keep central bank demand high." "Second, while not the base case of our portfolio strategists, a potential sharp equity sell-off may trigger margin-driven gold liquidation," said the analysts, speculating a sell-off would be "short-lived." Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre. Click here for in-depth analysis of the latest stock market news and events moving stock prices Sign in to access your portfolio
Yahoo
28-03-2025
- Business
- Yahoo
Gold Rises as Goldman Sachs Lifts Year-End Forecast to $3,300/oz
Gold prices jumped Thursday, after Goldman Sachs raised its year-end forecast for the commodity to $3,300 per troy ounce level. Analysts Lina Thomas and Daan Struyven said their increased year-end target reflected higher-than-estimated inflows into gold by exchange-traded funds as well as 'continued strong central bank gold demand.' Gold, a safe haven investment, has benefited from investors anxious about escalating trade wars and the prospects for U.S. economic prices jumped Thursday, after Goldman Sachs on Wednesday raised its year-end forecast of the commodity to $3,300 per troy ounce level. The investment bank had a target of $3,100/oz previously. Gold prices, which have surpassed $3,000/oz on March 14, and are now around $3,045/oz, have jumped in the past year as investors, anxious about escalating trade wars and U.S. economic growth, have flocked to traditional safe havens. Analysts Lina Thomas and Daan Struyven said their increased year-end target reflected higher-than-estimated inflows into gold by exchange-traded funds (ETFs) as well as 'continued strong central bank gold demand.' They said they expect large Asian central bank buyers to 'continue their rapid gold purchases for another 3-6 years.' The analysts said investors could find 'entry points' to acquire gold under two cases : A Russia-Ukraine peace deal that triggers speculative selling or a sharp drop in equities that leads to 'margin-driven gold liquidation.' They noted, however, that rules by Beijing allowing Chinese insurers to acquire gold may limit declines. Read the original article on Investopedia Sign in to access your portfolio
Globe and Mail
27-03-2025
- Business
- Globe and Mail
Goldman Sachs (GS) Lifts Its Price Target on Gold as Investors Flee U.S. Stocks
Wall Street investment bank Goldman Sachs (GS) expects gold bullion to continue shining as investors flee the volatile U.S. stock market. Light Up your Portfolio with Spark: Easily identify stocks' risks and opportunities. Discover stocks' market position with detailed competitor analyses. Goldman Sachs analyst Lina Thomas has raised her price target on gold this year to $3,300 an ounce, up 6% from $3,100 previously. Thomas said that the price of bullion should continue to get a lift as investors seek safety from the current volatility in equity markets, and as central banks ratchet up their buying of the precious metal amid increased geopolitical turmoil. Gold is currently trading at $3,054.24 and near an all-time high. Earlier in March, gold's price rose above $3,000 an ounce for the very first time, boosted by economic uncertainty over trade tariffs and signs of an economic slowdown in the U.S. Gold's price is up about 35% over the last 12 months. Gold ETF Action In her outlook, Thomas notes that there has been a sizable increase in money flowing into gold exchange-traded funds (ETFs) in recent weeks as nervous investors trade out of stocks and the benchmark S&P 500 index slumps. Additionally, the Goldman Sachs analysts says that gold is being buoyed by expectations for two interest rate cuts in the U.S. this year. 'While ETF flows generally track Fed policy rates, history shows they can overshoot during extended periods of macro uncertainty — such as during the Covid-19 pandemic,' she wrote. Lower interest rates reduce the opportunity cost of owning gold. Goldman Sachs isn't the only Wall Street firm that is bullish on gold. Bank of America (BAC) also just raised its gold price target to $3,500 from $3,000, also citing central bank buying and ETF demand. Is the GLD ETF a Buy? Most Wall Street analysts don't offer ratings or price targets on the SPDR Gold Trust (GLD), so we'll look at the ETFs three-month performance instead. As one can see in the chart below, the GLD ETF has risen 15.73% in the last 12 weeks.
