To be sure, some see the easing steps of central banks outside the U.S. as remaining supportive of gold ahead. Even the U.S. Federal Reserve might not start raising interest rates later this year.
“Gold is set for another bearish year,” Howie Lee, an analyst at Phillip Futures, said in a note Thursday before the metal’s decline in U.S. trading hours. He cited a “strong signal” of interest rate hikes ahead based on changes in the U.S. Federal Open Market Committee statement Wednesday.
“A hawkish U.S. Federal Reserve adds negative pressure on gold, as higher interest rates and a stronger dollar dims the appeal of gold as an alternative asset,” Lee said.
Goldman Sachs cut its 2016 forecast to $1,050 from $1,200.
“A material slowdown in global economic growth would be required to push the gold price sustainably higher from current levels,” Goldman said, adding that it expects above-trend growth in the U.S. will continue, with easing lending conditions and lower oil prices helping other developed markets to improve as well.
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