Gold prices have been rising, sometimes in fits and starts, for the past 12 years, in what many have dubbed a commodity super cycle. Now Reuters reports that financial giant Goldman Sachs believes the cycle has come to an end and gold could be set for a decline in the coming year.
Goldman's estimates mark a dramatic break even from its own earlier projections. In its latest analysis, the firm slashed its forecast for gold prices from $1,810 per ounce, which would have continued the trend of annual gains, down to only $1,600 per ounce. Estimates for next year are even more pessimistic, with projections plummeting from $1,750 per ounce to only $1,450 per ounce.
"Most of this price decline has coincided with a gradual increase in U.S. real rates, reflecting the combination of better-than-expected U.S. economic data, a more hawkish interpretation of recent Fed communication and a lower level of U.S. fiscal and European sovereign risks," the bank explained.
At 4:48 p.m. New York time, gold futures were up 1.66 percent, a $26.30 increase to $1,612.90 per ounce.
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