- Write by:
-
Thursday, June 16, 2022 - 14:42:58
-
1065 Visit
-
Print
Mining News Pro - Gold has been hit by a large “wealth shock” on the back of a weaker yuan following the economic impact of the lockdowns in China, the world’s largest consumer, according to Goldman Sachs Group Inc., which revised its price targets. Still, the worst may be over, it added.
The ongoing food and energy crisis and rising US rates have also seen other emerging market currencies under pressure, analysts including Mikhail Sprogis said in a June 14 note. This negative wealth effect for bullion has been further compounded by liquidation of short-term-oriented futures and exchange-traded fund positions, which are sensitive to trends in the dollar, they said.
Bullion has dropped more than 6% this quarter on rising bets that the Federal Reserve will be more aggressive in its monetary policy tightening path. Goldman economists expect two 75 basis-point hikes over the summer, which could sap US growth, add to fears of recession risks and boost gold investment demand.
“The wealth shock appears to have peaked, and we expect a rebound in emerging market gold demand in the second half of the year,” the analysts said. “In the absence of a large liquidity shock, we view current gold price weakness as a good entry point.”
The bank kept its upside outlook for the gold price but delayed the path by revising its three- and six-month targets to $2,100 and $2,300, from $2,300 and $2,500, respectively. The 12-month target of $2,500 was unchanged. Spot bullion was at $1,813 on Wednesday.
More from the report:
-Russian domestic gold production will stay inside the country as it faces a surplus of dollars and its central bank aims to prevent excessive appreciation of the currency.
-Given limited options for investment in foreign assets, the purchase of domestic gold output seems like one of the easiest ways to prevent excessive ruble strength.
-Global central bank demand is still on track to meet bank’s forecast for 750 tons in 2022.
Short Link:
https://www.miningnews.ir/En/News/621561
South African diversified miner Sibanye Stillwater is discussing with lenders to temporarily lift limits on borrowings, ...
Iron ore futures fell to their lowest in more than two weeks, pressured by an inventory accumulation at Chinese ports ...
Africa-focused Montage Gold announced Thursday it has received a ministerial order granting all environmental approvals ...
Nutrien, the world’s biggest fertilizer producer, beat first-quarter profit estimates on Wednesday, on strong demand for ...
Newmont Corp. has no plans to expedite a decision on its $2.5 billion Yanacocha Sulfides project, dashing the Peruvian ...
China’s central bank added 60,000 troy ounces of gold to its reserves in April, official data showed on Tuesday, ...
Gold rose after mixed signals from the US, where optimism is growing the economy is on target for a soft landing as the ...
Executives from Saudi Arabian mining company Manara Minerals are in Islamabad to continue talks about buying a stake in ...
Harmony Gold said on Thursday an employee working on planned rail maintenance had died at its Mponeng mine in South ...
No comments have been posted yet ...