Gold prices bounced back Wednesday, posting significant gains in early US trading, helped by a weak dollar and Goldman Sachs revised outlook, which raised its forecast price for the metal.
June Comex gold futures were last up $13.90 an ounce at $1,278.50. July Comex silver was last up $0.483 at $17.575 an ounce.
After seeing three back-to-back years of losses, the precious metal has rallied 20% this year, with some such as JP Morgan proclaiming that bullion is already in bull territory.
But Goldman Sachs’s overall forecast remains bearish. The investment bank revised its three-, six- and 12-month price outlooks for gold, raising them respectively to $1,200 per ounce, $1,180 per ounce and $1,150 per ounce, from $1,100 per ounce, $1,050 per ounce and $1,000 per ounce in an earlier forecast.
“Looking ahead, we see limited upside for gold pricing given the limited room for the Fed to surprise to the downside, limited room for the dollar to depreciate, and limited room for China to drive (emerging market) currency strength to contribute to dollar weakness” the bank said in its note.
Analysts at BMI Research agree. While they raised their 2016 gold price forecast to $1,275 an ounce, the firm believes global gold mine output will remain depressed until at least 2020.