Gold To Top Bitcoin And Silver On Way To $4K Per Oz, Says Goldman Sachs
The post Gold To Top Bitcoin And Silver On Way To $4K Per Oz, Says Goldman Sachs appeared on BitcoinEthereumNews.com. Standard gold bars for international trade weigh 400 ounces, worth about $1.3 million. AFP via Getty Images 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 post Gold To Top Bitcoin And Silver On Way To $4K Per Oz, Says Goldman Sachs appeared on BitcoinEthereumNews.com.
Standard gold bars for international trade weigh 400 ounces, worth about $1.3 million. AFP via Getty Images 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.…
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