It's been a rough start to May for gold, so far. Goldman says $1200 an ounce is possible due to several reasons.
“The main catalysts for further very near term downside in gold, in our view, is a repricing of U.S. rate increases (higher) and a QE reduction (faster), on the back of an increased expectation of U.S. tax reform or infrastructure delivery (cuts) or solid U.S. and global economic growth,” they say in a note to clients.
The Goldman team expects a “moderately lower” shift for gold in the next three months, down to $1,200 an ounce.
“Over the medium term, we would see any significant further pullback in gold as a buying opportunity as our 12-month target remains $1,250 an ounce,” the analysts say.