Wall Street’s precious metals analysts have gone gloomy on gold.
Especially in the wake of the Federal Reserve’s announcement to begin tapering its stimulative asset purchase program, experts think it’ll only get worse as the Fed eventually begins to tighten monetary policy in coming years.
“We expect gold to continue to fall as better data from the US continues to see interest rates rise, causing reduced demand for non-yielding gold,” wrote Goldman Sachs’ Eugene King. “We expect outflows from ETFs to continue and a reduced rate of central bank buying. Better jewellery demand on a lower price and physical buying of bar and coin in India and China, in our view, will be insufficient to support the price. We forecast gold at US$1,144/oz in 2014.”
Gold fell to $US1,188 on Thursday, the lowest level since August 2010.