In a report published this week, Goldman Sachs raised its forecast by $25 across the board over the next three, six and 12 months. The analysts now see gold prices pushing to $1350, $1400 and $1450 an ounce, respectively.
"The negative gold-real rates correlation has re-emerged, with the gold rally closely tracking the fall in real rates. In our view, this switch in the gold-rates correlation after the Fed pause reflects why this stage of the rate cycle is the sweet spot for gold," the analysts said.
"Higher rates can lead to more financial-market volatility and recession fears, boosting safe-haven demand for gold, while a rate cut boosts gold demand as it lowers opportunity cost of holding gold."
Looking at silver, the investment bank raised its short-term and long-term forecasts up 25c. Analysts predict silver prices rising during the next three, six and 12 months to $16.50, $17 and $17.50 an ounce, respectively.
Overnight, the gold price was fixed at $1284.84 per ounce
The WTI crude oil price was up overnight at $56.54 per barrel.
In softer commodities, cocoa decreased $63 per tonne or 2.81% to $2183/t yesterday from the $2246 in the previous trading session, tradingeconomics.com reported. Historically, cocoa reached an all-time high of $4361.58/t in July of 1977 and a record low of $211/t in July of 1965.
Coffee decreased 1.85c per pound or 1.94% to 93.65c/lb yesterday from 95.50c/lb in the previous trading session, tradingeconomics.com reported. Historically, coffee reached an all-time high of 339.86c/lb in April of 1977 and a record low of 42.50c/lb in October of 2001.