The current coronavirus-induced economic and financial market turmoil is seemingly the perfect environment for gold.

“We have long argued that gold is the currency of last resort, acting as a hedge against currency debasement when policy makers act to accommodate shocks such as the one being experienced now,” said analysts at Goldman Sachs led by Jeffrey Currie.

Yet while the yellow metal GC00, +0.33% has done far better than other assets, it has slipped 2% over the last month.

The Goldman analysts, with a 12-month price target of $1800 an ounce, said that is about to change, thanks to the Federal Reserve’s aggressive bond purchase plan unveiled on Monday, in which the U.S. central bank said it would buy as many Treasurys and mortgage-backed securities as needed to keep financial markets running smoothly.

The Goldman analysts said gold has been weighed down by a world in need of dollars, requiring forced sales of liquid assets like gold. The downturn in oil CL.1, +0.48% as Saudi Arabia and Russia fail to agree on production cuts has also created dollar shortages for emerging market economies, which may have made Russia a net seller of gold, according to Goldman.

In 2008, the Goldman analysts noted, the November announcement of quantitative easing was a turning point.

“We are beginning to see a similar pattern emerge as gold prices stabilized over the past week and rallied [Monday] as the Fed introduced new liquidity injection facilities with this morning’s announcement,” they said.

The analysts that said with the Fed easing funding stresses, focus will likely shift to the large size of the Fed balance sheet expansion, increase in developed market fiscal deficits and concerns about the sustainability of the European monetary union.

“We believe this will likely lead to debasement concerns similar to the post [Global Financial Crisis] period,” they said.

In electronic trade on Tuesday, gold futures rose $97 an ounce.