The firm expects gold to fall to $1,050 per ounce by the year end as concerted central bank action outweighs any nerves related to the presidency of Donald Trump or Brexit.
The surprise election of Trump as president of the US last November triggered a global rally in gold, the biggest seen since the UK’s Brexit vote sent gold markets flying last June.
Capital Economics is not alone in revising its views to the downside lately. UBS analysts recently lowered their price forecasts for gold this year – albeit only to $1,300.
With such wide disparities between the prices expected by analysts, it remains for investors to select what they believe is a sensible weighting in gold.
But with US military commanders reportedly moving carrier fleets towards the Korean peninsula yesterday there may yet be scope for further gold-price rises, even if the Fed wins the battle in the long run.