Goldman sees gold falling to $1270 by the end of 2014.
“We see risks to current prices as skewed to the downside as we move through 2013,” Goldman analysts Damien Courvalin and Jeffrey Currie told clients. “In fact, should our expectation for lower gold prices continue to prove correct, the fall in prices could end up being faster and larger than our forecast.
The bank cut its three-month view on gold to $1,530 an ounce from $1,615. It also dropped its six-month forecast to $1,490 from $1,600 and its 12-month gold outlook to $1,390 from $1,550.
Gold is often considered a refuge from economic uncertainty and a means of safeguarding wealth. It’s also viewed as an inflation hedge. Considering the Fed has been buying $85 billion a month in Treasurys and mortgage-backed securities in an effort to spur the economy, one would think the precious metal would do well in this type of environment.
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