Fortune Financial Services has come out with its special fundamental report on Gold. "Goldman Sachs predicts a 'significant decline' in gold in 2014, following losses of around 26 percent in the previous metal so far this year. Bullion is set to fall at least 15 percent next year," says the report.
Fortune Financial Services' special fundamental report on Gold
Gold is headed for its first annual loss since 2000 as an improving economy cut demand for wealth protection. Gold in international fell 28 percent this year to USD 1,201.10 an ounce. Investors lost faith in the precious metal as a store of value as equities rallied and an economic recovery prompted the Federal Reserve to pare its USD 85 billion in monthly bond purchases. Assets in exchange-traded products backed by gold fell 33 percent to the lowest since 2009 amid sales by billionaires George Soros and John Paulson. The Standard & Poor’s 500 Index climbed 29 percent and it set for its best year since 1997, while the International Monetary Fund signaled this month the U.S. economy will expand more than forecast. Investors gave up at least temporarily on the notion that central bank stimulation was going to cause an inflationary problem in western economies in the foreseeable future.
The gold price would likely have performed better this year if it wasn’t for the actions of the Indian government. As Western investors sold their gold ETFs and moved into equities and other asset classes, Indian citizens began lining up to buy cheap gold. Indian citizens bought over 15 tones in just three days. The rise in gold imports to meet the demand affected India’s current account deficit, and on May 3, the Reserve Bank of India imposed restrictions on imported gold. Two months later, the RBI introduced an 80:20 scheme, whereby 20 percent of imported bullion had to be exported back. Gold trading was also banned in special economic zones. The measures resulted in total gold consumption in India dropping by 50 percent, from 310 tonnes in the second quarter to 148t in Q3, according to the World Gold Council.
Gold forecast 2014
J.P. Morgan cuts 2014 gold forecast by 10 percent
Goldman predicts steep losses for gold in 2014
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