The US dollar has entered a continuous long-term decline phase, and the rise in gold prices is one of the performances

Aihua Forex APP News - Goldman Sachs' global head of foreign exchange, interest rates and emerging markets Kamakshya Trivedi said the dollar has entered a continuous long-term decline phase, and as U.S. bonds fall together with U.S. stocks, foreign investors are revaluing the risk returns of dollar-denominated assets He said on Tuesday: "I think the dollar's weakness will be further, I think this will continue and deepen." Trivedi said that the dollar has fallen the most against the euro so far, but the yen may be the next beneficiary. "I think if you start to see some data start to weaken, then you may see the yen move again, too. So far, these data are actually quite resilient. It's a typical super safe harbor, and I think if the U.S. labor market data starts to have problems, we may soon be back to a low of over 130," he said. "I think that will tell you whether the euro or the yen will be the lead, but I think the dollar weakness will continue." When asked if this means the dollar's decline is a permanent state, Trivedi thinks it's more of a long-term decline. "I think there's some fundamental change here," he said. "The first thing that changes is the outlook for the U.S. economy, and I think the risk of a recession is very high. I think people, especially foreign investors, are revaluing the outlook for U.S. assets, dollar assets. I think the same is true for stocks, because they are closely related to returns and the economy. But I think the disassembly of correlation is especially important. If you're a foreign investor in U.S. bonds, a big part of its appeal is the hedge value it provides to you. When U.S. stocks are down, those assets should have risen. If they don't plan to do so, if they don't plan to do so, it's a big part of the appeal.Doing this at this time, I think it will really be a concern for people. What I am more worried about is that in this case, foreign investors will revalue the risks and returns of U.S. assets. "Afterwards, Trivedi was asked whether the continued gold price increase also indicates that the market will continue to depart from the dollar. On Tuesday morning, spot gold prices hit an all-time high of more than $3,500 per ounce after being adjusted for inflation. "I think gold is definitely telling you that, and it has been telling you for some time," he said. You have seen the central bank buy gold in large quantities, which is a big source of demand. I think this is telling you that people want to spread the dollar assets into a wider range of safe haven assets, and I think gold is one of them. "One of the challenges is that there are no obvious alternatives, which is why I think it's too early to give up the dollar as a safe haven asset." This has been a challenge and is still a challenge. We still believe that the dominance of the US dollar in global trade flows will last for some time, but that doesn't mean that if the marginal dollar allocated starts looking for more diversified asset portfolios, not just the main dollar assets, you won't see the dollar weakness continue. That's what we expected. "On April 14, Goldman Sachs raised its year-end forecast for gold prices, from $3,300 at the end of the year to $3,700, citing stronger central bank demand and increased recession risk driving increased inflows of ETF funds. The investment bank said it expects central bank demand to average 80 tons per month, higher than the previous forecast of 70 tons, and far higher than the monthly 1 by 2022https://aihuaforex.comThe baseline of 7 tons. It also points to the surge inflows of gold ETFs driven by recession concerns. Economists at Goldman Sachs currently believe that the probability of a U.S. recession in the next 12 months is 45%. Goldman Sachs estimates that if the central bank purchases an average of 100 tons per month, gold prices could reach $3,810 per ounce by the end of 2025. On the ETF side On the contrary, if the recession occurs, ETF inflows may return to the level of the epidemic, supporting gold prices to rise to $3,880 by the end of the year. On April 7, Goldman Sachs analysts told investors that any pullback in gold should be regarded as an entry opportunity, and they continue to recommend longing gold, believing that this is their "firm view of aihuaforex.commodities." Goldman Sachs analysts wrote in a report at the time: "We maintain the year-end gold price estimate at $3,300 per ounce, with an estimated range of $3,250 to $3,520, mainly reflecting the upside risks of investor positions. We continue to believe that risk tends to rise relative to our estimates. "Further support for gold will aihuaforex.come from structural demand from emerging market central banks, as well as increased funds flowing into ETFs due to recession concerns and Fed rate cuts. They also noted that gold and other precious metals were exempt from new tariffs, they do not expect the Trump administration to impose tariffs on them in the future. Gold remains the bank's expected prominent asset, which it believes macroeconomic risks and relatively few investor positions have laid the foundation for further gains. Analysts said: "We believe that this, along with other potential declines in the gold market, is an opportunity for investors to go long gold."

The above content is about "[Aihua Foreign Exchange Market Analysis]: The US dollar has entered a continuous long-term decline stage, and the rise in gold prices is one of the performances". It was carefully aihuaforex.compiled and edited by Aihua Avatrade Foreign Exchange Editor. I hope it will be helpful to your trading! Thanks for the support!

Only the strong know how to fight; the weak are not qualified to fail, but are born to be conquered. Step up to learn the next article!