NEW YORK--Goldman Sachs Group Inc. GS +2.45% on Tuesday closed its recommendation to "short" gold, telling clients to exit bets on lower gold prices.
The bank had told its clients to bet on lower gold prices April 10, slashing its short- and long-term gold forecasts as prices dangled above bear-market territory at $1,588.30 an ounce.
At the time, analysts Damien Courvalin and Jeffrey Currie told clients that "should our expectation for lower gold prices continue to prove correct, the fall in prices could end up being faster and larger than our forecast."
On April 12, gold embarked on its worst two-day plunge since futures first started trading in New York.
As a result, Goldman said its team exited the trade "significantly below our original target of $1,450/oz" for a potential gain of about 10%.
Now, as prices rebound above $1,400, the team recommends its clients close out their bets on lower prices for the moment.
"Our bias is to expect further declines in gold prices on the combination of continued ETF outflows as conviction in holding gold continues to wane as well as our economists' forecast for a reacceleration in U.S. growth later this year," they said