According to ChainCatcher, citing data from Jinshi, Goldman Sachs stated that the recent decline in gold prices is largely consistent with past trends, noting that rising interest rate expectations and market volatility are the main factors contributing to the price drop.
"Given our existing pricing framework, this decline is not surprising," said Dan Struven, co-head of global commodities research at the bank, on Wednesday. He noted that rising interest rate expectations have already impacted investor demand, particularly through ETFs. Extreme market stress can also affect gold prices, as investors facing margin calls often sell gold along with other assets.
He also pointed out that the recent surge in gold prices has exceeded fundamental expectations, and some of the pullbacks reflect a "certain degree of normalization." However, Goldman Sachs maintains its overall optimistic outlook, predicting that gold prices will reach $5,400 by the end of the year. This is supported by continued central bank gold purchases by governments worldwide as part of asset diversification efforts (i.e., shifting towards assets with "lower political and financial risk").
