Goldman Sachs Sees Gold Price Dropping to $1,200

Gold had a strong start to the year, reaching a quarterly peak of $1,257.64 an ounce in February as investors turned to safe-haven assets. 
Even so, the gold price is far from the $1,300 mark, which it last breached before the US election last year. And some market watchers believe that if strength in the US economy continues it will not pass $1,300 anytime soon. Notably, analysts at Goldman Sachs (NYSE:GS) are now calling for a gold price of $1,200 in the next three months.
“The key catalysts we see for this move will be markets repricing to reflect higher US rates, a faster Fed balance sheet normalization, increased expectations of US tax reform, and stronger [economic] growth,” analysts at the firm said in a note released this week.
That said, the writing isn’t on the wall yet. Other analysts believe that increased tension in North Korea or slower-than-expected US and global growth could challenge Goldman Sachs’ gold price forecast.
“Every now and again, something geopolitical, or financial market-related causes people to knee-jerk buy gold, but the two key drivers over any extended period of time have been dollar debasement and inflation,” Troy Gayeski, a senior portfolio manager at SkyBridge Capital in New York, told Bloomberg.