Goldman Sachs Lowers Gold Forecast to US$930/oz.

Source:

"Goldman expects gold prices to rise to US$962 an ounce on a 12-month horizon."

Goldman Sachs has cut its gold price forecast to US$930 an ounce in the next six months because of an expected reduction in buying by gold-backed exchange-traded funds.

In February, The U.S. bank raised its gold price forecast to US$950 an ounce in the next six months.

"Should real interest rates move lower or buying by gold-ETFs continue at its current torrid pace, however, the upside risk to prices would be significant, the bank said in a note.

"(Data) suggests that higher real interest rates increase the rate of gold mine production while lower real interest rates slow the rate of mine production."

Goldman expects gold prices to rise to US$962 an ounce on a 12-month horizon.

Holdings of gold ETFs surged in recent months as equity prices crashed and worries over the economy persist, spurring demand for bullion as a safe-haven asset.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings rose to 1 124,99 tonnes as of 24 March, up 10,7 tonnes from the previous day.

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