Goldman Sachs cut 2013 Gold forecast to $1,600, 2014 to $1450

                       Leading global investment banking and securities firm Goldman Sachs cut its 2013 gold price forecast to $1,600 an ounce from $1,810 an ounce.

In a statement, Goldman Sachs cut its three-month gold-price forecast to $1,615 an ounce from $1,825, its six-month forecast to $1,600 an ounce from $1,805 and its 12-month forecast to $1,550 an ounce from $1,800.

The bank also cut its 2014 forecast to $1,450 an ounce from $1,750 an ounce. It said gold's recent price drop and an increase in U.S. real interest rates have led it to bring forward its projections for a decline in the metal.

Goldman Sachs said while the latest sell-off is "likely excessive," it has "exposed a quickly waning conviction in holding gold positions, especially ETFs.

If that projection proves accurate, it will mark the first year gold has recorded a lower average price year-on-year since 2001, when its record-breaking 12-year bull run began, the bank said.

Goldman predicted a turn in gold's bull cycle in December, saying a rise in real interest rates on the back of improved growth could offset any further balance sheet expansion from the Federal Reserve.

Courtesy : Bullion Street