Pointing to forecasts for stronger U.S. economic growth later this year, longtime gold bull Goldman Sachs (GS) slashed its price targets on the precious metal on Wednesday, warning prices could tumble below $1,300 an ounce by the end of 2014.

The Wall Street heavyweight not only told investors to close their long gold position, Goldman is now recommending a short COMEX gold position as one of its top trades.

“While there are risks for modest near-term upside to gold prices should U.S. growth continue to slow down, we see risks to current prices as skewed to the downside as we move through 2013,” Goldman analysts Damien Courvalin and Jeffrey Currie wrote in a note to clients.

Marking Goldman’s second downgrade in six weeks, the analysts cut their average 2013 gold price forecast to $1,545 from $1,610 and their 2014 average to $1,350 from $1,490. Goldman also set a $1,450 year-end target for 2013 and a $1,270 year-end target for next year.

Goldman cited gold’s “recent lackluster price action” even after the deposit bail-in debacle in Cyprus as well as its economists’ forecasts for U.S. growth to accelerate later this year to above-trend pace, supporting U.S. real rates.

“While we may be end up too early in entering this trade, we prefer that to being late given our belief that the skew to current prices is to the downside,” Goldman wrote.

The downgrade helped weigh on the metals market on Wednesday. Gold dropped $10.00 a troy ounce, or 0.63%, to $1,576.70, putting the precious metal on pace to extend its slump of more than 5% so far this year.  Gold has retreated over 16% since hitting record closing highs of $1,880.70 in August 2011.

Goldman advised clients to close their long COMEX gold position that the bank first initiated on October 11, 2010 back when gold traded at about $1,345 a troy ounce.

On a longer-term front, Goldman said its price forecast for 2017 and beyond remains at $1,200. “While higher inflation may be the catalyst for the next bond cycle, this is likely several years away,” the firm warned.

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