The prices of precious metal are estimated to fall to $1,000 an ounce by December this year, from the current level of $1,140 an ounce, according to ABN Amro.
A sharp decline in prices is likely to be led by a possible interest rate hike by the US central bank this year, apart from metal losing its sheen as a safe-haven asset.
“We are of the opinion that gold’s safe-haven status has been reduced significantly,” Gulf News quoted the bank, as saying.
In July, gold prices fell to five-year lows as expectations heightened over the US Federal Reserve starting its rate hiking cycle in September. However, the metal reversed all the losses as China opted for yuan devaluation.
“The gold market has dramatically changed with the arrival of gold products that opened the market to a wider public. Gold is not only bought as a protection for uncertain times but also for speculation purposes. The latter goes completely against gold’s safe haven character and at times it more than overshadows it,” it said.