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Goldman More Bearish on Gold

In a research note Monday, Goldman Sachs revised its gold forecasts lower–the fourth time since December that the investment bank has taken an increasingly bearish position.

Last week, gold shed more than 6 percent of value. This adds to its 2013 losses of about 23 percent. After an epic fall in April that led to a small rally, gold now sits just off of its 2013 lows.

Goldman Sachs (NYSE: GS) believes that the near term outlook is stable since most of the recent fed action is now priced into the commodity. It revised its 2013 forecast lower by 9.4 percent to $1,300–about where gold closed on Friday.

It’s 2014 forecast is more dreary. It expects the metal to end 2014 at $1,050–17.3 percent lower than its previous forecast.

Goldman said in the note,

“Medium term, we expect that gold prices will decline further given our U.S. economists’ forecast for improving economic activity and a less accommodative monetary policy stance. Further, with quantitative easing tapering likely to start soon, perhaps even a bit sooner than previously anticipated, we are fast forwarding on our real rate path.”

Not everybody agrees. Some, including Monday CNBC guest Sean Hyman, said that he sees gold regaining its safe-haven status and possibly correcting from its recent lows.

Early Monday, gold is down about 1 percent.

Disclosure: At the time of this writing, the author had no position in gold investments of any type.

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