Another blow to gold – Goldman Sachs slashes 2013, 2014 forecast

Not even Cyprus turmoil could do it. Or exceptionally weak U.S. data. Or general fears of a backlash in the global recovery. Gold prices currently struggle to shine as a safe haven and regain its past fame, prompting analysts at Goldman Sachs to slash their gold price forecasts. For the second time in less than two months, that is.
The gold team at Goldman now sees an average price of $1,545 an ounce in 2013, down from an earlier forecast of $1,610, with average prices falling even further to $1,350 in 2014 from $1,490 expected previously.

“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. Read: An S&P chart that could be pointing to a correction
“With our economists expecting few ramifications from Cyprus and that the recent U.S. slowdown will not derail the faster recovery they forecast in 2H13, we believe a sharp rebound in gold prices is unlikely,” they added.

Gold futures for June delivery GCM3 +0.12% fell Wednesday, stepping back from their strongest level since the start of the month. Speculative traders have also been down on gold.
But even as gold puts in an upbeat forecast from time to time, Goldman says it looks set for a decline on both the short, medium and long term. The investment bank trimmed its three-month forecast to $1,530 an ounce from $1,615, its six-month outlook to $1,490 from $1,600 and its 12-month forecast to $1,390 from $1,550.

“While there are risks for modest near-term upside to gold prices should U.S. growth continue to slow down, we see risks to current prices as increasingly skewed to the downside as we move through 2013. 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 analysts said. Read: Bill Gross turns bullish on 10-year Treasurys on Japan’s bond binge

The move from the U.S. investment bank comes a day after Deutsche Bank poured cold water on its own outlook for gold prices. The bank Tuesday slashed its 2013 average forecast by 11.8% to $1,637 an ounce ounce for 2013.
Barron’s noted a day ago that not everyone in the market is seeing a sell sign over gold.
NYU economist Nouriel Roubini is, though.