Goldman: Long gold is best commodity play right now, will hit $1,450 this year

According to Jeffrey Currie, global head of commodities research at Goldman Sachs, long gold is one of the best plays investors can make as risk aversion becomes the theme of 2019, reports Kitco. Currie affirmed gold’s position ahead of other commodities, stating that recessionary fears and heightened central bank purchases will give a heavy boost to the metal.

Having previously called for $1,425 this year, Currie now sees gold shooting up to $1,450 as defensive appetite strengthens. With weaker-than-expected global growth and historically-recessionary central bank policies, concerns that another crisis is on the way could be validated.

Past that, Currie reminded investors that gold’s price, like other assets’, increases when there is heavy buying. Last year’s central bank acquisitions certainly qualify as that, as governments around the world blew away previous forecasts with their bullion purchases. Currie singled out India’s 70-ton gold acquisition in 2018, together with an expected increase in buying by the People’s Bank of China.

Bart Melek, the head of global strategy at TD Securities, agreed that central bank gold demand will play a key role in gold’s upcoming upturn. Having increased their holdings by 3,900 tons, or 13%, since 2009, central banks are expected to buy an additional 800 tons in the next two years, with defense and diversification as the primary motives. To Melek, this could have a dramatic effect on gold’s price and push it above the already-bullish predictions.