Gold (XAUUSD) fell to the lowest level in a week as a rally in equities damped demand for an alternative investment amid concern that physical consumption is faltering.
Gold for immediate delivery lost as much as 0.7 percent to $1,294.98 an ounce, the lowest since July 16, before trading at $1,295.92. The metal has retreated for three days, and is on course for the first back-to-back weekly drop since May.
Goldman Sachs Group Inc. reiterated a call for gold to drop to $1,050 by the end of 2014 as the U.S. economic recovery accelerates, analysts wrote in a report dated yesterday. The bank raised its long-term forecast 13 percent to the marginal cost support level of $1,200 in 2014-dollar terms.