There is a high tendency that BTC and gold will become the people’s best choice for reserving their money if there is a continuous lack of trust in the USD.
As a result, Goldman Sachs thinks that the price of gold will climb by 20% before 2022 reaches its end so that its price will reach $2,300.
Gold was sold at $2,000 per ounce for the first time on July 31. Despite the achievement it made, Goldman says more is yet to come. Bloomberg reported that Goldman Sachs had stated that it would only take gold 12 months to reach $2,300. At first, Goldman made a prediction of $2000 for gold but with the loss in trust of the USD as a reserve currency, it raised the prediction to $2,300.
Some officials at the investment bank said the USD is being affected by debts owed by the government and the depreciating value of the currency. The price of gold at the moment is a little bit lower than $2,000.
Gold and BTC are favored by similar factors
One of the reasons why the government may be facing debt accumulation is because it has issued out a lot of money to residents in form of stimulus checks to cushion the effect of the COVID-19 pandemic. Goldman says anytime this happens, the prices of gold and silver rise.
So, if the U.S. dollar depreciates, people will look for other alternatives to save their money.
Apart from gold, Bitcoin has shown tremendous progress as an alternative to saving money for the future. Since March, it has performed better than gold as a reserve asset.