The price of gold was down 0.70 percent, or nearly $10 in Thursday afternoon trading to $1,298 per ounce on the Comex, as a number of investment banks released their own grim forecasts for the yellow metal.
Earlier in the week, Jeffrey Currie, the head of commodity research at Goldman Sachs (GS) reasoned that gold would be a “slam dunk” for shorting in 2014, predicting that prices would be kept lower by rising interest rates and increased inflation that are sure to accompany an ongoing US economic recovery. Credit Suisse AG (CS) has also chipped in with its own bearish outlook, saying on Tuesday that bullion would be "crushed" over the coming 12 months,
Morgan Stanley (MS) for its part drastically slashed its predictions for the average price-per ounce of bullion in its quarterly metals report released on Monday, from the $1,420 forecasted for this year down to $1,313 in 2014.
After nearly 13 years of uninterrupted price growth, 2013 seems to be the year that the metal has met its Waterloo, having already lost over 22 percent of its value. In June, prices hit a 34-month low of $1,180.50 on the London Metals Exchange on the expectation that the Federal Reserve would begin to pull back on fiscal stimulus before the end of the year. While the deadline has been delayed somewhat, it is generally assumed that stimulus spending will be curtailed to at least some extent in the coming months, and this could send sharply lower.
Not all brand-name investment banks have such a grim take on bullion, however. Kevin Norris of Barclays Plc (BCS) commodity research took issue with the notion of gold as a “slam dunk” of a sell, saying that “in this sort of environment, you can make a strong argument that gold isn’t too bad a thing to hold.”
Given the comprehensive brutality of gold's collpase over the past 9 months, however, it is unclear what catalysts there are to provide price support.
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