Goldman Sachs: Gold to Hit $2,900 by 2025

Attention gold bugs...

Goldman Sachs is doubling down on their bullish outlook. They've just bumped up their early 2025 gold price forecast up to $2,900 per troy ounce. And get this – it's their second major revision this year. 

What's driving this golden optimism? A perfect storm of factors: faster drops in interest rates across the West and China, emerging market central banks going on a gold-buying spree, and good old-fashioned risk hedging. 

Looks like the long-awaited precious metals bull run is charging full steam ahead! 

Billion-Dollar Standoff: Historic US Ports Strike Challenges Economy

The United States faced a potential economic crisis as dockworkers at major ports along the East and Gulf coasts initiated a strike, bringing container and auto shipments to a grinding halt. This work stoppage affected 36 ports responsible for handling up to half of US trade volumes, threatening to cost the economy billions of dollars daily.

With the upcoming presidential election looming, the stakes were high, and the duration of the strike would determine its full economic impact. Experts warned of substantial losses and prolonged shipping congestion, painting a grim picture for businesses and consumers alike. 

Eleventh-Hour Dockworker Deal Averts Major Global Crisis 

In a dramatic turn of events, a potential catastrophe has been narrowly averted. The International Longshoremen's Association and the U.S. Maritime Alliance reached a tentative agreement on wages, effectively suspending the port strike that had involved tens of thousands of dockworkers.

This crucial deal includes a significant wage increase for the workers and extends the current contract until January 15, 2025, providing a much-needed breathing space for further negotiations on outstanding issues.

The agreement successfully ended a tense three-day standoff that had threatened to severely disrupt supply chains and deal a heavy blow to the U.S. economy. For now, it seems, the gears of global trade will continue to turn smoothly.

Measuring Inflation Through Everyday Items 

Last week, we delved into a fascinating perspective on inflation and purchasing power using an unexpected metric: the iPhone/Gold ratio. In short, Incrementum, a leading gold research firm, showed the latest iPhone 16 Pro can be purchased for just 0.60 ounces of gold – a 23% decrease from its predecessor, the iPhone 15 Pro, which cost about 0.78 ounces. 

Continuing their innovative approach to economic analysis, Incrementum has now turned their attention to another beloved consumer item: beer at Oktoberfest. Their latest research report examines the beer to gold ratio at the world-famous Munich festival. 

For the 2024 Oktoberfest, beer prices are set to range from €13.60 to €15.30 per liter, marking a 3.87% increase from 2023. Some large tents will breach the €15 threshold for the first time.

While this might seem steep to some, it's actually lower than the historical average inflation rate of 4.0% since 1950, and significantly less than last year's nearly 8% jump.

Gold’s Consistent Purchasing Power

Remarkably, just as with iPhones, the beer/gold ratio reveals a decrease in the cost of beer when priced in gold. This consistent pattern across different consumer goods demonstrates gold's powerful ability to hedge against inflation. 

While dollars in your savings account are steadily losing purchasing power, gold is holding its own – and then some. You might not be able to pay for your next iPhone or Oktoberfest stein with gold coins, but these examples clearly show that saving in gold could help you keep pace with rising prices far better than relying on the dollar.

So, next time you're thinking about your long-term savings strategy, you might want to consider adding some real assets like gold or silver to your portfolio.

After all, in a world of ever-increasing prices, preserving your purchasing power is worth its weight in gold. 

Best,

Brandon S.  
Editor
GoldSilver