The global investment banking and securities firm, Goldman Sachs has reiterated that despite the current pricing weakness gold is still targeted for a 12-month prices of $1940/oz. They have also targeted a six-month price target for the precious metal of $1840/oz.
Goldman goes on to also say that gold still remains the last resort currency considering the situation in Britain and Spain where there is a climate of economic recession. Along with Greece not honoring the bailout fund and desiring to abandon the euro for their former Drachma. This is combining with the Chinese and U.S. economic growth projections are looking to be sluggish by economists over the next three quarters.
The factor with the precious metal is not that it will rise again, but rather how long will it remain at its current weak level or will it fall more. Last September in the U.S. market gold reached an all-time high of $1920/oz. while on the London Bullion Market Association (LBMA) market gold reached a high of 1348.43 for the same month.
With the advent of the billion dollar blunder by JP Morgan Chase gold came to the rescue of investors and also created a bear market for investors with previous metal sales and pricing decline. However, this is not a lost cause situation for the investor. Wit bear markets for gold comes buying power.
How long will the window of opportunity remain open for investors in the gold market? According to current market figures in the US, has represented a 9% price decline from March 26. Which leaves many in the US market wondering what depth will the gold market price bottom out at. Looking over the LBMA from the same period there has been a 4% price decline.
Gold price fluctuations in the U.S. have been more volatile than in Europe which is an indication of the greater economic instability in the U.S. due to continued lack of fiscal responsibility to the economy by the federal government.
However from a historical point of view the word by Goldman Sachs and gold reaching $1940 is not at all unrealistic considering its position this time last year was around $1500/oz. So the liquidity and value still remains with the precious metal as a safe investment.