Edison said the total US monetary base, currency in circulation and inflation had historically moved in tandem and gold in tandem with them, but in light of the Fed's plan to shrink its balance sheet by an unprecedented third over the next five years, it had shifted the basis of its forecasting to predicting the gold price solely in terms of future changes in US currency in circulation, which put the gold price at $1,622/oz in 2021.

However, if the US Federal Reserve successfully reduced its balance sheet by $1.48 trillion, and this was reflected in the monetary base, Edison suggested the gold price should fall to $661/oz in 2021 before recovering close to current levels a decade later.

It noted a 39.2% contraction of the monetary base was without precedent in the modern era and it could cause strengthening of the dollar, a deep domestic US recession and material downward pressure on price - which might be averted if growth in currency in circulation could be maintained.

"In this case however, unquestionably the most benign outcome as far as the gold price is concerned is the one in which the total US monetary base contracts, but inflation remains subdued, currency in circulation continues to grow and asset prices (including that for gold) remain high," the report said.

"Nevertheless, we continue to show the results of our other analyses in order that investors may make their own assessments of the future prospects for the price of gold within the parameters of their assumptions regarding the future evolution of the US economy."