Gold prices to fall back to $900/oz by year-end

Gold prices are struggling again. We do not believe that prices had risen beyond levels that could ever be justified by fundamentals. Nor is it hard to imagine circumstances where they might spike higher in the next few months. However, the occasional short-lived rally and the absence of a bubble in gold prices is unlikely to prevent them from falling well below $1000/oz by year-end as inflation fears fade and the US dollar strengthens further.