By Nat Rudarakanchana
International Business Times
Gold mining companies should lock in 2013 prices by hedging their production as all signs point to further declines in the yellow metal in coming months, Goldman Sachs Group analysts said recently.
In a research note, the analysts reiterated their forecast for gold to fall below $1,050/oz in coming months, well below its Wednesday opening price of $1,309/oz. Meanwhile, Goldman’s 2014 year-end price forecast represents a 20 percent decline from current prices.
That means gold miners, who are struggling after years of inflated capital spending, should lock in gold prices at 2013 to avoid further losses in 2014 and beyond.
“We continue to expect that gold prices will resume their decline heading into 2014, when we expect economic data to solidly confirm a reacceleration in U.S. growth,” they wrote. “We recommend producers lock in current gold prices for 2013 and beyond.”