Goldman Sachs Reaffirms Gold Prices To Fall To $1050.

Gold continued its decline in the Asian session to trade at 1189.10 down by $3.80, surprising traders. Most predicted gold would climb a bit in the morning after falling $23 on Friday. It was thought that traders in Asian would buy up the cheap commodity. Precious metals are another victim of the dollar’s resurgence as gold futures, lost 1.83% to $1,192 per ounce. On Thursday Goldman Sachs stuck to its forecast for the price of the “yellow metal” to fall to $1,050 per ounce over the coming twelve months.

Precious metals continued losses to touch their lowest this year after U.S. payrolls beat forecasts, boosting the dollar and stoking expectations the Federal Reserve will increase interest. Platinum fell to a five-year low and silver declined to the lowest since 2010. Platinum is down $21.65 this morning trading at 1204.05 while palladium fell to 746.60 down $10 and gold’s sister silver gave up 56 points to trade at 16.770. Silver was the least volatile supported by positive base metal action.

Metal traders are running from gold as signs that the U.S. economy is accelerating boost the dollar and increase expectations the Fed will move closer to raising borrowing costs. Higher rates reduce gold’s allure because the metal generally only offers investors returns through price gains, while a stronger dollar typically cuts demand for a store of value. Prices are headed for the first back-to-back annual loss since 2000 after tumbling 28 percent last year, the most in three decades.

The jobs report shows that the Fed has all but achieved its objective on the labor market. Wages growth remains disappointing and that will play into Fed chair Yellen’s dovish hands, but the pendulum in favor of normalization is swinging towards action, rather than continued inertia. Expectations of a US rate hike have dented gold’s safe haven appeal, despite uneven growth in Asia and Europe. The gold price is now close to the ANZ’s end-of-year target of $1180 an ounce. The bank then expects the metal to pick up steadily in 2015, setting quarterly price targets $1220 for March, $1260 for June, $1280 for September, and $1320 in December.

Copper climbed this morning to trade at 3.009 up by 10 points. Copper and aluminium bounced after touching multi-month lows, but traders said the move may not last as investors remained worried about a strong dollar and weaker demand in top metals consumer China. Copper has been hit by a combination of weaker growth in Europe and China, a buoyant dollar and prospects for a surge of supply. Traders said increased demand from consuming industries and a report of a firming global trend mainly supported the upside in nickel and copper prices.