According to a recent note from Goldman Sachs, wealthy people store up on physical gold, as in bullions, coins, and bars. As a result, traders who are bullish about gold say it's the time to shine on the precious metal.
"I think that gold will hit $2,500, $3,000 an ounce in the 2020s because the climate, gold ecosystem is so overwhelmingly supportive." Paul Schatz, president of Heritage Capital, told Yahoo Finance's On The Move.
Goldman Sachs presented reasons for owning gold in a recent note citing concerns about recession and political uncertainty as catalysts for investors to lean towards gold. Gold prices have risen nearly 20 percent over the past year and gold is on track in a decade for its best year.
Projections Too Low
Goldman Sachs expects the price of the precious metal to hit the $1,600 per ounce next year. Schatz argues that the outlook of Goldman Sachs is too low. "$1,600 per ounce will be a footnote."
What's fascinating about this cycle is that it's not just gold exchange-traded funds and other theoretical securities that fuel demand for gold, but people who buy real gold bullion," Schatz said.
Based on Schatz's observations, "in some capacity, an individual investor should have 5 percent to 10 percent of precious metals. Those who don't trust markets will want to buy gold coins. They're confident with anything, "he said.
Meanwhile, in early U.S. trading on Wednesday, gold prices are slightly higher, but prices are likely to tread water and stay not far from unchanged levels ahead of the FOMC meeting.
Gold futures in February last amounted to $2.00 an ounce at 1,470.10. The silver prices of March Comex last fell $0.007 to $16,695 an ounce.
Bulls Vs Bears
Technically, in the midst of choppy and sideways trading lately, the gold bulls and bears are on a fair overall near-term technical playing field.
The next upside price target for Bulls is to deliver a close-up futures at $1,500 in February above strong resistance. The next near-term price reversal goal for Bears is to drive future prices below solid technical support at the low of $1,453 in November.
March silver futures bears reclaimed the overall near-term technical advantage and restarted on a more than three-month downtrend.
The next upside price breakout goal for Silver Bulls is to close prices above solid technical resistance at last week's $17,415 ounce mark. For the bears, the next downside price reversal target is to close prices at $16.00 below solid support.
