Goldman Sachs cuts 2013 Gold Outlook


Last Wednesday, Goldman Sachs revised and lowered its price forecasts for gold in 2013. It cites growing downside risks to the yellow metal’s price.

The bank cut its three-month gold forecast by 0.8% to $1,825 a troy ounce, its six-month forecast by 7.0% to $1,805/oz and its 12-month forecast by 7.2% to $1,800/oz. It also introduced a 2014 gold price forecast of $1,750/oz.

“While we see potential for higher gold prices in early 2013, we see growing downside risks. As a result, we find that the risk-reward of holding a long gold position is diminishing,” the bank said.

While gold prices should remain supported in the near-term by further economic easing in the U.S. and continued weak economic growth, medium-term, “the gold outlook is caught between the opposing forces of more Fed easing and a gradual increase in U.S. real rates on better U.S. economic growth,” Goldman Sachs said.

“Our expanded modeling suggests that the improving U.S. growth outlook will outweigh further Fed balance sheet expansion and that the cycle in gold prices will likely turn in 2013,” it added.

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