Goldman Sachs tells clients it is time to buy gold
Gold continued to push higher on Tuesday as a recent wave of selling dried up and Goldman Sachs told its clients the time had come to buy the “currency of last resort”. Like other asset classes, gold was hit hard in the recent scramble for US dollars, falling more than 12 per cent from its early March peak of around $1,700 a troy ounce to $1,460 last week. The yellow metal started to see a resurgence on Monday, rising by more than 4 per cent after the Federal Reserve said it would buy unlimited amounts of government bonds and the US dollar fell. It gained another 4 per cent to $1,618 on Tuesday helped by the recommendation from Goldman Sachs, which said gold was at an inflection point and could hit $1,800 over the next 12 months. The record high for gold is $1,900, reached in 2011. “We have long argued that gold is the currency of last resort, acting as a hedge against currency debasement when policymakers act to accommodate shocks such as the one being experienced now,” said Jeffrey Currie, head of commodities at the Wall Street bank. As well as being seen as a hedge against all kinds of market volatility, gold is viewed by many investors as a way to protect themselves from the debasement of currencies and also inflation.