The biggest gain in gold wagers in the last 18 months was experienced after hedge funds raised their bets on a gold rally. Meanwhile, Goldman Sachs Group expected the gold rally to reverse.
In July, Gold futures increased by 8.6%. This was the biggest gain since January of last year after Federal Reserve Chairman Ben S. Bernanke raised speculations that a cut in bond purchases loomed to occur. Goldman Sachs predicted that the metal's price would decline by July 22.
According to Goldman Sachs analysts headed by Jeffrey Currie, gold prices would go down as the economy in the US improves. The analysts added that the decline of prices would mean a less accommodative monetary policy stance. The bank also forecasted that the gold prices would drop by US$1,050 by the end of the following year. Bloomberg also surveyed thirteen analysts who said that the prices of the metal are expected to increase this week. The confidence among American consumers also increased in July as shown by a private report.
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