On Tuesday, UBS said it has lowered its gold price forecasts for 2013. The bank cites the yellow metal’s weakness since the beginning of this year.
The bank reduced its 2013 gold price forecast to $1,740 per ounce from $1,900, while maintaining its forecast of $1,700 per ounce for 2014. Both projections, however, still remain above the current price levels.
A UBS analysts wrote in a note that market concerns on the longevity of the Federal Reserve’s quantitative easing, a rotation into equities and the focus on better economic growth are valid threats to gold’s upside potential, in addition to a stronger dollar.
UBS also reduced silver price forecasts for 2013 by 12 per cent, to $32.30 per ounce. The white metal still lacks price drivers of its own, and relies on gold for direction, despite analysts’ expectations for rising demand .