Goldman Sachs forecasts $1,940/oz gold, cuts commodities traders
Subdued U.S. growth in 2012 will likely support gold prices, "although risks to our constructive view are rising," say Goldman Sachs commodities analysts.
Posted: Friday , 30 Mar 2012
RENO (MINEWEB) -
Goldman Sachs has reiterated its constructive outlook for gold prices this year and its 3-month, 6-month, and 12-month forecasts of $1,785 per ounce, $1,840/oz and $1,940/oz respectively.
"We acknowledge, however, that continued strong US economic data poses growing risk to our forecast for rising gold prices," said commodities analysts Damien Courvalin, David Greely, and Jeffrey Currie.
The analysts stressed they expected gold prices to climb "as subdued US growth reduces the market's expectation of real rates. Consequently, we recommend near-dated consumer hedges in gold through 2012."
"With gold prices expected to continue to climb through 2012, we find hedging opportunities less attractive for gold producers at this time," they advised.
Goldman Sachs also continued to recommend a long gold position. "Buy December 2012 COMEX Gold (initial value of $1,800.5/toz, current gain $318.13/toz)," the analysts suggested.
Meanwhile, Reuters has reported that at least 20 commodities traders have left Goldman Sachs in the past months. Goldman said the departures will not have an impact on its standing in commodities.
"We are not downsizing our commodities business, it remains a core part of our franchise," a Goldman spokesman told Reuters.
Goldman is believed to employ around 400 traders in its commodities division, which generated $1.6 billion last year, Reuters reported.