Goldman Cuts Gold Price Forecast Through 2014 as Cycle Turns
By Glenys Sim - Apr 10, 2013 8:59 AM ET
The turn in the gold price cycle is accelerating after a 12-year rally as the recovery in the U.S. economy gains momentum, according to Goldman Sachs Group Inc., which reduced forecasts for the metal through 2014.
The bank cut its three-month target to $1,530 an ounce from $1,615 and lowered the six- and 12-month predictions to $1,490 and $1,390 from $1,600 and $1,550. Goldman recommended closing a long Comex gold position initiated on Oct. 11, 2010 for a potential gain of $219 an ounce, analysts Damien Courvalin and Jeffrey Currie wrote in a report today.
Gold dropped 5.8 percent this year on speculation that the Federal Reserve may pare its stimulus amid an economic recovery.
The gold price is in bubble territory, Societe Generale SA said in an April 2 report.
Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, declined to about 1,200 metric tons yesterday, the least since June 2011. Deutsche Bank AG cut its 2013 gold outlook yesterday by 12 percent, citing a strengthening dollar and a lack of haven buying.
“Despite resurgence in euro-area risk aversion and disappointing U.S. economic data, gold prices are unchanged over the past month, highlighting how conviction in holding gold is quickly waning,” the Goldman analysts wrote in the report. “While higher inflation may be the catalyst for the next gold cycle, this is likely several years away.”
more:
http://www.bloomberg.com/news/2013-04-10/goldman-lowers-gold-price-forecast-through-2014-as-cycle-turns.html
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