Goldman Sachs has put out a report to its clientele projecting a growth in investments of gold and silver through 2012.

November 14, 2011 – Goldman Sachs, one of the most venerated investment banks in the United States, has put out a report to its clientele projecting a growth in investments of gold and silver through 2012. “We expect gold prices to continue to climb in 2011 given the current low level of US real interest rates,” the bank stated. After three positive weeks and a 1.8% gain in the gold market last week, Goldman’s projection comes at a good time for gold and silver investors.

While the financial crisis in Europe is generally acknowledged to be affecting the price of gold in real time, no one knows how and when the process will play out, making it incredibly difficult to plan for in advance. The real interest rates in the US is a much more reliable indicator of the future behavior of the markets and an excellent indicator of the performance of gold in the coming twelve to sixteen months.

Goldman Sachs is not alone in its forecast, either. Credit Suisse cited real US interest rates as a “key driver” for the price of gold to extend over the $1,800 mark in the coming days.

Goldman’s call options for gold are currently at $2,000 an ounce while the spot price $1,778, underscoring Goldman’s expectation for gold to perform and perform well in the coming weeks. With regards to silver, Goldman cites the historical silver to gold ratio, linking good performance in the gold market to likewise performance in the silver market.

Investing in gold and silver has been a well-recognized strategy with the current year to date price of gold up 25% in US dollars. Goldman’s report reflects not only the potential but the near necessity gold has of growing further in the future in response to monetary policy in the United States. The price of gold and silver will continue to climb due to real US interest rates.

Investing in gold and silver is now the clear intention of smart money.

Shannon King

Senior Staff Writer –

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