“2019 saw the resurgence of gold investment demand, and subsequently gold prices, which spiked nearly 20 per cent in the third quarter to about $1,550 per ounce,” Mr Inton said.

“A similar rapid appreciation occurred in early 2016 which at the time we said would not last. Though our view proved true in the following months, today’s environment is different.

“With the Federal Open Market Committee cutting the federal funds rate three times since August 2019, gold’s investment case has strengthened. We expect 2020 gold demand to be 8 per cent higher than it was in 2018, leading to our 2020 price forecast of $1,500 per ounce.”

Mr Inton said price volatility in the coming months would hinge on the Federal Reserve’s decisions around interest rates, as the rise of gold ETFs had made it easier for large investors to rapidly buy and sell the precious metal.

“Investment-driven buyers, especially through ETFs, can quickly sell when real interest rates rise,” he said.

“ETF-held gold has reached record levels equivalent to roughly a year’s worth of mine production, and its unwinding would significantly weigh on prices. As such, we expect mid-cycle gold demand to be 9 per cent lower than our near-term forecast, leading prices to decline to our mid-cycle forecast of $1,250 per ounce in real terms by 2022.”

Mr Inton said as a result of this outlook, gold mining stocks were unlikely to outperform in the coming year, particularly as demand for gold jewellery in key markets was also slowing down.

“A combination of government initiatives and shifting preferences is driving slower growth in jewellery demand in China and India, the two largest markets, despite rising incomes,” he said.

Mr Inton added that while initiatives such as joint ventures could “create value” in gold miners, “our forecast for declining gold prices outshines any operational upside, leaving shares trading roughly in line with or slightly above our fair value estimates on a risk-adjusted basis”.