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Goldman Sachs: gold a 'slam dunk' sell
by David Campbell on Oct 09, 2013 at 11:29
Gold is a ‘slam dunk’ sell once the US economy works through its current policy deadlock and the Federal Reserve begins to reduce its asset purchases, Goldman Sachs has warned .
Speaking at a panel session in London, Goldman head of commodity research Jeffrey Currie said selling gold was his top single call for the next 12 months. The bank has a price target of $1,050 over that period, implying a fall of 20% from its current value of $1,309.
Gold has already fallen 25% over the last 12 months and is now down almost 30% from its 2011 peak above $1,800. Despite the risk aversion of the past week, gold has continued to slide.
‘Once we get past this stalemate in Washington, precious metals are a slam dunk sell at that point,’ he said, Bloomberg reports. ‘You have to argue that with significant recovery in the US, tapering of QE should put downward pressure on gold prices.’
He added that he expected the US government to resolve the current impasse before significant harm was caused to the global economy or the country broached its current debt ceiling.
‘The downside of driving the bus off the cliff is so significant that we will come to a resolution,’ he predicted.
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