Gold News

Goldman Sachs lowers metals forecast, gold at $750

Leading investment bank Goldman Sachs has lowered its forecasts for metals in 2008, with gold not falling as far as others.

The group claimed that rising supply and concerns over demand had led it to reduce its predictions for base metals, but conditions for gold were different.

Supply of the precious metal has been outstripped by demand of late, with Goldman Sachs admitting that gold had its own unique set of factors.

The company's report said: "We continue to expect gold prices to trade inversely with the U.S. dollar given gold's currency-like properties of being a store of value and a medium of exchange.

"As Goldman Sachs economists continue to expect the U.S. dollar to strengthen on a 12-month horizon of expectations of a narrower U.S. current account deficit, we believe that gold prices will decline to $750/toz."

While predicting a minor drop-off in price, analysts at the firm also recommended people to buy gold with a "sell" recommendation for the December 2008 COMEX gold contract at an opening value of $841/toz.


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