gold has had a choppy year but goldman sachs says the precious metals upside potential is currently significantly greater than the downside risks gold prices spiked from levels around 1800 per ounce at the start of the year to around 2000 in march but have declined pretty steadily since then spot gold was trading around 1650 an ounce on tuesday however goldman said there remains uncertainty ahead for gold prices gold has had a choppy year torn between growth and inflation risks and higher real rates and the strong dollar goldman analysts wrote in an oct 11 note in our view there remains a lot of uncertainty around the future path of us inflation growth rates and the central bank cbs reaction functions as such the investment bank has therefore run four economic scenarios and predicted where gold prices could end up in each case a soft landing goldman gave this scenario a 30 probability gold prices could fall to 1530 per ounce – an almost 8 decline from tuesdays price in this scenario us inflation eases next year and the country avoids a recession goldman strategists also assume us 10year real rates at 17 marginally above current levels as us growth concerns decline investors would likely rotate out of safehaven assets like gold and into equities a recession with substantial rate cuts 30 probability gold prices spike to 2250 per ounce – around 35 rally from tuesdays price under a more severe recession scenario the us federal reserve gradually cuts rates to zero by 2025 goldman assumes the 10year real rate drops by 1 although it predicts a smaller fall due to a lower willingness to stimulate on inflation worries higher inflation more hikes 20 probability gold prices could fall to 1500 per ounce – around 9 drop from tuesdays price this scenario indicates a path that continues the feds war on inflation goldman assumes 10year real rates rise another 15 and recession concerns stay elevated a recession with limited rate cuts 20 probability gold prices could rally to 2000 per ounce – around 20 jump from tuesdays price the fed funds rate gradually falls to 25 by 2025 under this scenario due to a shallow contraction and sticky inflation growth concerns together with the fall in real rates should trigger a material rotation towards defensive assets goldman wrote the investment bank said that in applying its growth and real rate tradeoff model to these scenarios it found that golds upside potential is currently significantly greater than the downside risks our main finding is that elevated recession risks create a positive asymmetry in golds return profile namely golds downside in the case of a soft landing or further fed hawkishness is significantly less than golds upside in the case of a growth shock that pushes the us economy into a recession goldman wrote for those considering investing in gold cnbc pro asked a slew of wall street strategists for their views earlier this month euro pacific capitals peter schiff believes investors should seek refuge in gold which has served a unique role throughout history as a store of value whereas hedge fund manager david neuhauser despite being a selfdeclared gold bull said there was a massive headwind for the precious metal looking ahead