gold prices fell on wednesday ahead of crucial consumer price inflation data while investment bank goldman sachs slashed its forecasts for the precious metal along with silver citing increased focus on the federal reserve’s shifting priorities the main event for global asset markets on wednesday will be a july reading of consumer price inflation which is expected to show a slight retreat from the 91 annual pace recorded in june thanks to lower gasoline prices read us consumers likely got some relief from sizzling price increases in july but fed won’t feel any better gold was boosted on tuesday by safehaven flows as the dollar weakened and stocks fell for the fourthstraight session the ice dollar index dxy slipped 01 on wednesday while us equity futures es00 were modestly higher “a softer inflation reading could be just what it needs to break through the resistance barrier and establish itself above 1800 once more something it hasn’t managed to do since earlier in the summer” said craig erlam senior market analyst at oanda in a note to clients elsewhere strategists at goldman sachs cut their forecasts for the precious metal that the bank said is straddling joint fed worries over high inflation and weak growth earlier in 2021 the bank raised its gold forecast to 2500 an ounce on expectations us recession fears would boost demand historically a bigger driver than real rates “while we expected nominal rates to increase on the back of fed hikes we did not expect inflation expectations to fall so much after the failure of the transitory narrative and high persistent inflation surprises” said a team of goldman strategists led by mikhail sprogis in a note late tuesday “the main conclusion is that in the current environment of tightening policy and persistent recession concerns the tactical direction of gold will be determined by shifts in fed priority function between inflation fight and growth support” said the strategists goldman cut its 3 6 and 12month gold forecasts to 1850 1950 and 1950 an ounce from a prior 2100 2300 and 2500 respectively the bank expects silver to reach 21 23 and 25 an ounce respectively from a prior 30 an ounce across that multimonth time frame for gold to form a structural trend higher the fed would need to face “intense questions” about its inflationfighting commitment such as seen in the 1970s said goldman for the precious metal to form a material downside trend inflation would need to keep surprising to the upside and the fed would need to deliver on an “unconditional” resolve to bring it back down neither are the base case for goldman