Goldman Sachs Exchanges
Why oil and gold prices could keep rising
Oct 8, 2024
Daan Struyven, co-head of commodities research at Goldman Sachs, dives into rising oil and gold prices influenced by geopolitical tensions in the Middle East and China's stimulus. He discusses the implications of potential retaliatory actions against Iran and how they could disrupt supply. Struyven also emphasizes gold's bullish prospects, predicting prices could rise significantly amidst changing monetary policies. He argues that gold is a superior investment hedge compared to oil, navigating through various economic uncertainties.
17:44
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Quick takeaways
- Escalating conflicts in the Middle East are significantly influencing oil prices, potentially driving them to mid to high $80s per barrel.
- Gold prices are anticipated to rise due to central banks diversifying reserves away from the US dollar amidst economic uncertainties.
Deep dives
Escalating Geopolitical Risks and Oil Prices
Recent missile attacks in the Middle East have intensified concerns about supply disruptions, significantly impacting oil prices. The geopolitical risk premium had been modest until the escalation, as prior conflicts did not result in physical supply interruptions. However, if the situation worsens, potential reductions in Iranian oil supply could lead to substantial price increases, possibly reaching mid to high $80s per barrel. Historically, OPEC countries have effectively offset supply losses, but the ability and willingness of these nations to react to current tensions will be critical in determining the overall market stability.
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