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Wealth Shock Delays Gold Bull Market as Goldman Revises Targets

Gold has been hit by a large “wealth shock” on the back of a weaker yuan following the economic impact of the lockdowns in China, the world’s largest consumer, according to Goldman Sachs Group Inc., which revised its price targets. Still, the worst may be over, it added.

The ongoing food and energy crisis and rising US rates have also seen other emerging market currencies under pressure, analysts including Mikhail Sprogis said in a June 14 note. This negative wealth effect for bullion has been further compounded by liquidation of short-term-oriented futures and exchange-traded fund positions, which are sensitive to trends in the dollar, they said.