Gold is expected to remain under pressure in the near term, according to Goldman Sachs as the investment bank holds its three-month target at $1,200 per ounce.

The yellow metal is down $10.94 per ounce from Friday’s close ahead of the French election. Gold is currently trading at $1,273.52 per ounce after centrist Emmanuel Macron made it into the run-off for the French presidency sending a wave of relief across markets. Mr Macron will compete against rightwing populist Marine Le Pen in the second round of voting on May 7.

Goldman expects the sell-off to continue, saying:

This week is likely to continue to be volatile but should provide further catalysts to the downside in our base case scenario, as we may see a rally in real rates following the expected unveiling of President Trump’s tax policies on Wednesday (or shortly thereafter), and as our US economists do not expect a US government shutdown on April 29.

Goldman points to possible US rate hikes and faster reduction of quantitative easing following increased expectations of US tax reforms and solid US and global economic growth as bearish catalysts for its three-month view for gold.

The investment bank said increased military tensions in North Korea or slower-than-expected US and global growth could see prices challenge their outlook.

Goldman’s 12-month target for gold remains at $1,250 an ounce.

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