In an interview, Goldman Sachs CEO Lloyd Blankfein explains how he believes the recent strength of gold prices is different from previous gold rallies.
It is rare that the boss of Goldman Sachs speaks personally and publicly about gold. In an interview at the “Evolve 2019 Investment Summit” supported by the World Gold Council, Lloyd Blankfein answered the question of what he thinks is driving the gold price. In his opinion, the recent gold strength is based on known mechanisms.
The low interest rates made the gold position cheaper (keyword: opportunity costs). And an uncertain economic and political environment like today would have supported the gold price again and again in the past, said the CEO and Chairman of the US investment bank. One aspect, on the other hand, is new. And here Blankfein expresses himself much more elaborately than the moderator. She speaks of de-dollarization, that is, a move away from central banks from the US dollar to gold.
The US and gold
Blankfein says: “The power to be a reserve currency and to have control over the infrastructure of the economic system gives the United States a lot of influence over the international affairs of other countries and that is now being used to a great extent. I don’t mean to criticize whether the policy we are trying to implement is good or bad, but it can go against the interests of other countries. “And further:” Therefore I think it would benefit many countries in the world if the dollar and its world reserve currency status would not give the US the power it does. This is another factor [in terms of gold price], which encourages many people’s desire to weaken the reserve aspect of the US dollar. ”