Gold price keeps growing, even though it slightly dropped in the first half of April. Investors still take advantage of 'forced selling' imposed in mid-March, when they had tried to accumulate means to long positions and expected longer period of low interest rates.
Gold rally interrupted the traditional stock-bond correlation, which fell as some investors left safe havens for shares. Yet, others sold more shares in fear of growing bond offer, possibly caused by announced stimulus packages. Large fiscal stimulus packages have been introduced and some launched in the U.S., Europe and many other countries.
Goldman Sachs Bank analysts predict a similar progress of gold as in 2008. Twelve years ago, gold had been affected by forced selling before a growing rally started, caused by fear of long-term currency depreciation.
According to
Golden Brokers, we may appear in so called inflection point, when fear-driven selling begins to dominate liquidity-based selling pressure as it was in November 2008. Short-term and long-term forecast of gold seems to be more constructive and it is more probable that gold could reach $1,800 per ounce, the target price set by Goldman Sachs.
In recent weeks, the price of gold has grown roughly in $200 per ounce, and added more than 10%. It will be interesting to watch whether banks' forecasts will be met or possibly even exceeded.