Goldman Sachs: Stock Up On Gold And Silver

Goldman Sachs: Stock Up On Gold And Silver

over 3 years ago2 mins

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Goldman Sachs reckons precious metals like gold and silver could bring investors big gains in 2021, and they’re not the only commodities the investment bank recommends stocking up on 🏅

What does this mean?

Goldman Sachs is forecasting gains of 30% for commodities in the next twelve months, and there are a couple of reasons for that boom. For starters, there won’t be as much investment in oil extraction, which means less of the slippery elixir to go round and higher prices for whatever is available 🛢 For another thing, governments have been trying to recover from the economic impact of the pandemic by pumping money into infrastructure, which will involve a whole assortment of commodities. And let’s not forget that economies are being flooded with trillions of dollars in an effort to encourage consumers to spend their economy-boosting cash. That’s going to push up the price of goods and services, which is expected to lead to higher inflation. And seeing as that’ll erode the value of hard-earned savings, investments in “safe havens” like gold will start looking a lot more appealing.

Source: Bloomberg
Source: Bloomberg

Why should I care?

There are all sorts of commodities investors could pick from, but Goldman Sachs sees most near-term upside in so-called “non-energy commodities” like metals and some agricultural products 🌾 Of all of them, it’s keenest on gold and silver, which it’s expecting to rise by 20% over the next three months.

Goldman Sachs thinks the gains from commodities could be even higher if there’s a Democratic win in the upcoming US elections 🇺🇸 The investment bank thinks the party’s proposed climate plan could boost demand for both copper and silver – the latter of which is used heavily in solar panels. In fact, Goldman Sachs has worked out that if the Democrats win and China follows through with bringing forward its renewable targets, silver prices could be set to jump another 9%.

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