Goldman Sachs downgrades forecasts

Goldman Sachs has published revised price forecasts for base metal, gold and silver.

The investment bank’s commodity analysts have altered their figures to reflect a “retrenchment in commodity prices from recent highs, which has already largely occurred”.

Forecasts for base metal prices have been reduced because of an expected global economic downturn, although prices could still “reach historically high levels in some cases by year-end”. In the case of copper, opening a long timespread is recommended.

With regard to gold, the report suggest “opening a short position in gold-deferred contracts” because of the likelihood of a stronger US dollar resulting from “a narrower US current account deficit”.

The bank’s analysts believe this could put downward pressure on the gold price because they “continue to expect gold prices to trade inversely with the US dollar given gold’s currency-like properties”.

On silver, the report asserts that “silver prices continue to track gold prices tightly and are also expected to decline in line with gold prices.”

The analysis concludes with a 12 month gold price forecast of $750/toz and 12 month silver price forecast of $13.70/toz.