LONDON (MarketWatch) -- Investment bank Goldman Sachs Monday raised its forecasts for gold and silver prices, noting that its economists now place a one in three chance of a U.S. recession that would most likely occur within the next six months.
Goldman warned that the rising risk of a negative global event amid unsettling sovereign debt issues and lower growth forecasts will underpin gold going forward, especially given a decline in U.S. real rates and weaker U.S. economic outlook.
But gold is still "underbought," the bank said, and is lagging the collapse in U.S. real rates. With the weaker outlook for U.S. economic growth delaying the likelihood of higher rates by mid-2012, Goldman now expects to see gold's rally extend through next year instead of peaking.
For spot gold, the bank increased its three-month forecast by 5.1% to $1,645 a troy ounce from $1,565/oz, its six-month forecast by 5.8% to $1,730/oz from $1,635/oz, and its 12-month forecast by 7.5% to $1,860/oz from $1,730/oz previously.
Goldman also said that the broadening euro-zone sovereign pressure has once again moved the European debt crisis to the forefront. "Escalating pressure on peripheral euro-zone sovereigns as policymakers have yet to agree on a convincing solution to the European debt issues has generally increased the risk of a global financial event that could at least temporarily derail our constructive commodity views," the bank added.
Similarly Goldman raised its silver forecasts. It now sees three-month silver at $27.5%, up 5.3% from $26.1/oz previously, six-month silver up 5.9% to $28,9/oz from $27.3/oz and 12-month silver at $31.1/oz, up 7.6% from $28.9/oz.
"Over the long run, silver prices tend to track gold prices. Thus, our silver forecast reflects the historical ratio to gold," the bank added.
0 comments:
Post a Comment