Goldman stands by $1,050 gold price target on recovery

singapore — Gold will resume a decline as US economic growth accelerates, according to Goldman Sachs Group Inc, which reiterated a forecast for the metal to end the year at $1,050 an ounce.

Bullion’s rally this year was spurred by poor US data probably linked to the weather and rising tension in Ukraine, analysts led by

We expect a sequential acceleration in both US, China

Jeffrey Currie wrote in a report, describing the reasons as transient. With the tapering of the Federal Reserve’s bond-buying program, US economic releases will return as the driving force be- hind lower prices, he wrote.“It would require a significant sustained slowdown in US growth for us to revisit our expectation for lower gold prices over the next two years,” Currie wrote in the report. “While further escalation in tensions could support gold prices, we expect a sequential acceleration in both US and Chinese activity, and hence for gold prices to decline.”

Gold for immediate delivery traded 0.6 per cent higher at $1,325.89 an ounce at 4:43pm in Singapore, according to Bloomberg generic pricing, after the United Nations Security Council met to address the Ukraine crisis. Bullion last traded below $1,050 an ounce in February 2010.

Bullion is the least preferred commodity among metals as prices resume a decline this year on the outlook for rising US interest rates and low inflation expectations, Morgan Stanley said in a report on April 8. —