News) - Goldman Sachs has reiterated its bullish stance on gold prices, issuing a research report titled “time to buy the currency of last resort.”
Analysts said the metal acts as a hedge against currency debasement at times when policymakers take drastic actions to deal with massive economic shocks, such as the one currently occurring due to the COVID-19 pandemic.
Gold has been under pressure during the last couple of weeks. Like other firms, Goldman attributed this to market participants facing “severe funding constraints” as risk markets nose dived, meaning they were forced to sell liquid positions in gold and other commodities to generate cash. Further, the downdraft in oil prices led to dollar shortages in emerging economies, which could mean Russia’s central bank could shift from a gold buyer to seller, the bank said.