Gold targets are heading down, if the latest update from RBC Dominion Securities is any indication. The price of gold has been struggling over the past seven months, zigzagging its way down 12 per cent from its record high of $1,900 (U.S.) an ounce last September.

Will gold ever approach that September high again? RBC analyst Stephen Walker sounds doubtful, forecasting that gold is going to trade in a range of $1,600 to $1,800 an ounce in the near term, and then slipping to $1,500 by 2014 and $1,300 by 2015. The problem, as he sees it, is that the typical factors that drive gold higher are going to fade in the coming years.

“The decline to $1,300/oz in our 2015 price assumption reflects a recovery in the global economy, resolution of the sovereign debt issues, and no significant inflation,” he said in a note.

Gold producers, which have generally failed to keep up with gold on its way up, might do okay on the ride down – particularly large-cap dividend-payers with low costs, which can still generate big levels of cash flow. Mr. Walker’s top picks include Goldcorp Inc. , Yamana Gold Inc. and Eldorado Gold Corp.

Still, he trimmed his price targets by a range of 3 per cent to 11 per cent. His target on Goldcorp Inc. falls to $64 from $68. His target on Yamana falls to $22 from $23. And his price target on Eldorado falls to $19 from $22. However, all three new targets still point to expectations for plenty of gains ahead, averaging around 40 per cent.

Meanwhile, for investors who aren’t buying into the current round of optimism over the economy, Mr. Walker offers this little nugget of doom: “If further sovereign debt issues arise in Europe and/or a weak U.S. economy triggers QE-3, we could see gold trade higher later in the year, particularly in the seasonally strong period in late August and September.”