Gold and macro environment, page-1102

https://www.afr. com/markets/commodities/gold-could-hit-us4500-as-confidence-in-us-havens-crumbles-20250414-p5lrhd

AFR … Goldman Sachs says it’s a “ very low probability event” but mentions it anyway due to wanting to illustrate a non-linear upside to gold prices …
In the spoiler is an AFR story from this evening looking at what various market makers are doing, saying and thinking ..

Spoiler : Gold could hit  US $4500 ?

Gold could hit $US4500 as confidence in US havens crumbles
Alex GluyasDeputy markets editor
Updated Apr 14, 2025 – 4.22pm,first published at 11.49am



The world’s biggest investment banks are upgrading their forecast for the gold price amid a historic exodus from the US bond market that is extending the precious metal’s record rally and could push prices to as much as $US4500 an ounce.

Gold, which typically rallies during times of uncertainty, surged 7 per cent last week and climbed above its $US3245 peak an ounce on Monday as investors dumped Treasuries and the greenback, underscoring a dramatic erosion of faith in the stability of the world’s largest economy.

Central bank buying and huge inflows in gold exchanged-traded funds amid the escalating trade war between the US and China prompted Goldman Sachs to up its year-end gold target over the weekend to $US3700 an ounce, while UBS has tipped prices to average $US3500 an ounce next year.

Goldman said prices could trade near $US4500 an ounce by the end of this year in an “extreme” scenario should central bank up their gold purchases to 110 tonnes a month, ETF holdings return to pandemic levels and speculative trader positioning hits the top of its historical range.

Gold reset its record on Monday, bolstered by its save haven status.
“Gold could plausibly trade near $US4500 an ounce by the end of 2025,” said Goldman analyst Lina Thomas. “We view this as a very low probability event, but include it to illustrate the non-linear upside to gold prices.”
Australian investors have been scrambling to up their exposure over the past week amid the market turmoil. Global X said its gold ETFs experienced a massive $38 million of inflows on Friday alone – its fifth-largest day on record and eclipsed only by episodes during the 2008 global financial crisis, the 2020 pandemic sell-off and a pre-US election surge last year.

“I am personally of the view that gold and gold equities are entering a structural bull market,” Charlie Aitken, an investment director at Regal Partners, wrote in a note to clients over the weekend. “Multiple market sources cite that Beijing is actively selling down its holdings of US Treasuries and buying gold. This, in turn, is weakening the US dollar.”
The flight to safety across global financial markets is intensifying amid the tit-for-tat between the US and China. Washington last week lifted its overall tariff on China to 145 per cent, while Beijing responded with a 125 per cent tax on US goods.
‘Beast mode’

The anxiety temporarily eased over the weekend after US President Donald Trump paused import duties on a range of consumer electronics, thought indicated on Monday that it would only be temporary.
Fears that the trade war between the world’s two largest economies could tip the US into recession have pushed gold prices up more than 20 per cent already this year, and analysts are bullish that its next leg higher could be fuelled by a rotation out of American assets and into the precious metal.

“With heightened uncertainty and significant swings in global bond markets, investors are diversifying away from US safe haven assets like Treasuries into gold as an alternative store of value,” said Global X investment strategist Marc Jocum.
“Gold now is the premier safe haven asset … [and] could experience record-breaking inflows this month on the back of rapidly rising retail demand.”
Jocum said prices could be heading towards $US3500 an ounce as traders continue to sell other US havens. The greenback slumped 2.4 per cent last week while the yield on the closely watched 10-year Treasury bond soared to roughly 4.5 per cent from just below 4 per cent – the most pronounced spike in nearly a quarter of a century.

“Gold seems to be the clear beneficiary of the debates raging around the US dollar, and we’ve witnessed the gold price in absolute beast mode,” said Chris Weston, head of research at broker Pepperstone.
Gold prices initially sank 5 per cent after Trump announced sweeping tariffs on US trading partners on April 2 as investors liquidated positions to meet margin calls during the collapse in equity markets.

Citi was among a number of institutions that took profits on the precious metal a fortnight ago, but then decided to re-enter the trade last week, declaring that “the bulk of the selling pressure has unwound for now”.

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