Gold may hit $1,200 on low interest rates-Goldman
NEW YORK, Nov 10 (Reuters) - U.S. investment bank Goldman Sachs (GS.N) said gold could rise to record highs in a range from $1,150 to $1,200 an ounce, driven by declining real interest rates and renewed buying interest by central banks.
The fact that the yield on the 10-year U.S. Treasury Inflation-Protected Securities (TIPS) remained under 1.5 percent suggested upside risk to its gold forecast, Goldman said in a note dated Monday,
Goldman continues to have a 12-month target of $960 an ounce for gold. Spot bullion XAU= traded at above $1,100 an ounce on Tuesday after a strong rally in the last two months.
"Should 10-year TIPS yields remain at these levels, we would expect gold price to move to $1,150 to $1,200 a troy ounce," Goldman said.
The sale of 200 tonnes of gold to India by the International Monetary Fund (IMF) signaled an ongoing shift of central banks and governments from being net sellers to net buyers of gold, the bank also said. [ID:nSP375900]
"The purchase by India highlights the growing trend of central banks and governments in the emerging economies to increase gold holdings as a means of diversifying their currency reserves," Goldman said. (Reporting by Frank Tang; Editing by Lisa Shumaker)
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