Gold prices hit a four-month low today as worries over Europe's financial health, particularly Greece and Spain, and massive trading losses for JPMorgan hurt stock markets and the euro, prompting investors to shelter in the US dollar.
Spot gold slid to $1,573.29 an ounce, its weakest since Jan. 3, after support gave way at $1,579, and was down 0.8% at $1,581.40 an ounce at 13:46 GMT.
But Goldman Sachs told investors yesterday not to despair, forecasting a rally in gold this year.
Bloomberg said the global investment house saying the precious metal will move to $1840/oz over the next six months after the U.S. central bank embarks on a third round of stimulus in June.
Renewed turmoil in Europe this week saw investors flock to the relative safety of the US dollar, which rose against falls in the prices of commodities including precious metals, base metals and oil.