Goldman Sachs’ commodities team updated their outlook on gold, which includes a prediction that the yellow metal will peak in 2012.

In the firm’s report, Jeffrey Curie wrote that “We expect gold prices to continue to climb in 2011 as the resumption of quantitative easing should keep US real interest rates low. However, with the current round of QE set to end in June 2011, and our US economics team now forecasting strong US economic growth in 2011 and 2012, we expect US real interest rates to begin to rise into 2012, likely causing gold prices to peak in 2012.”

As for gold producers, Goldman Sachs noted that “While we expect gold prices to increase in 2011, our view that downside risks will likely increase heading into 2012 suggests this is a good time for gold producers to begin scaled up hedging of forward production, particularly for calendar 2012 and beyond.”

The full Goldman report can be accessed via Zero Hedge