(ZEROHEDGE) – After flirting with the "nice, round number" earlier this week, Gold – which soared by $150 in the past two weeks amid the relentless bank crisis – has just topped $2000 for the first time since March 2022 and then, since the Covid crash before it, when the Fed unleashed $10+ trillion in emergency liquidity.
The latest surge comes just hours after none other than Goldman Sachs raised its price target on gold from $1950 to $2050 overnight in a note titled "Fear is contagion."
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We excerpt several key sections from the note below: "Gold has rallied by over $150/toz over the past two weeks on the back of banking stress, captured by US 2-year yields recording the largest decline since 1987, which triggered a significant risk appetite reversal. The speed at which markets repriced a Fed pivot from 100bp tightening to 50bp in rate cuts by year-end has been unprecedented, leading to a spike in rates volatility to levels last seen in the depth of the 2008 financial crisis. During the sell-off, gold outperformed risk assets such as equities or credit, turning it into an effective hedge in the risk-off rotation. Cyclical commodities like oil and base metals fell sharply, largely on a liquidity shock as opposed to any change in underlying micro fundamentals that have, if anything, strengthened. Financially, this was a VaR shock that started in rates as SVB’s collapse forced a rethink on the path of the Fed Funds Rate."