Analysts at Goldman Sachs on Wednesday lowered their average gold-price forecast for 2013 to $1,545 an ounce from $1,610 expected previously and to $1,350 an ounce from $1,490 in 2014.
“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 analysts said in a note.
“With our economists expecting few ramifications from Cyprus and that the recent U.S. slowdown will not derail the faster recovery they forecast in H2’13, we believe a sharp rebound in gold prices is unlikely,” they added.
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 Incorporated.
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.