Gold may drop to $ 1200 in 2018

Today, Goldman Sachs decided to increase gold short bets, the agency commodity analyst said it expects 2018 gold prices fell to $ 1,200 / oz.

The report, the bank analyst Christian Lelong, said Max Layton, Damien Courvalin, Jeffrey Currie and Roger Yuan, assuming that the U.S. real interest rates, such as the most representative of the U.S. 10-year bonds rose to 2.0% in 2018, is expected to gold prices continuing to fall in the next five years, and the long-term expected gold fell to $ 1,200 / oz in 2018.

Goldman Sachs said that in addition to the effective interest rate, the linkage between gold and currency also affects the price of gold. Expected gold ETF physical market and the demand for central banks in 2013 will continue to increase the speed of 2009-2012, gold ETF demand slowdown in 2014. The currency will gradually stabilize in the next few years will slow and cut the price of gold rally. However, this assumption is a risk exists, the demand for physical gold may go the other way, but the gold market is negligible, because regardless of the currency stronger or weaker, not as good as the Fed's QE initiatives gold to impact force. Monetary policy further relaxation in order to change the price of gold prospects. However, a significant increase in gold investment demand when investors and major central banks also exists the potential required to buy cases suffer a similar monetary policy is no longer relax like so much impact when, having pushed gold prices higher gold ETF holdings or a sharp decline in This will in turn accelerate gold prices down.

Aspects of inflation, the bank also said that the gold trend established in accordance with the effective interest rate and currency demand model shows that inflation and the price of gold is usually a positive correlation. However, the possibility of inflation above the Fed target is relatively low for the following reasons:

Despite the significant expansion of the Fed gearing table, but inflation is expected to remain very strong.

2. Edge of economic decline is just so the decline in the unemployment rate was slower than expected

Commodity prices are expected stable than the previous year.

Finally, Qualcomm [microblogging] inflation suddenly appear, gold is likely to be offset by the following factors:

If the U.S. economy accelerated recovery, the U.S. real interest rates will quickly rise.

If inflation expectations rise, the Fed's gearing table or will stop expanding.

Goldman Sachs said that, in short, the higher effective interest rate is much higher than the suppression of gold continued monetary easing policies constitute the support for gold.