Big Money Managers Bearish on Gold


During the past few weeks, a number of large international investment banks issued reports or sent notes to investors in which all of them said that they are revising the gold price forecasts for 2013 and 2014. Some cut down the yellow metal’s price projections only by few percent, while others were more aggressive in their expectations.

Credit Suisse

On 4th of April, Credit Suisse downgraded its outlook on gold prices for 2013 and 2014. The bank cited that physical demand for gold in Asia won’t make it up for the lack of investment interest in other parts of the world. Credit Suisse lowered its average price gold forecast for this year by 9.2% to $1,580 per ounce. The financial entity also trimmed its 2014 average price forecast by 12.8% to $1,500 per ounce. Credit Suisse also revised its 2013 outlook on silver by 11.5% to $28.50 per ounce, while 2014 silver expectations fell by 13.1%.


Last Tuesday, UBS trimmed its gold price forecasts for 2013. The lower expectations are on the back of gold’s weak performance since the beginning of the year. The bank cut its 2013 gold price projections from $1,900 to $1,740 per ounce. Though, UBS kept its outlook for the prices in 2014. However, both expectations are much higher than the present market levels. The bank sees a number of upside potential factors which are believed to support the yellow metal. The most important are the extension of Fed’s stimulus, stronger dollar, better economic growth and a possible equity market rotation. The bank also downgraded its silver price forecast for this year. The expectations are now 12% lower, suggesting a price of $32.30 per ounce.

Deutsche Bank

Also on Tuesday, Deutsche Bank reduced its 2013 gold price forecast. The bank said that the yellow metal returns could be on course for their worst annual performance since 2000. Deutsche Bank trimmed its 2013 gold price forecast by 12% to $1,637 an ounce. In addition, the silver price outlook for the year is lowered by 16.5% to $31 an ounce. The bank believes that the factors which have boosted gold returns higher over the past decade have all moved into reverse since the end 2012. Those are namely declining real interest rates, the weaker US dollar and a pick up in US equity risk premium.

Goldman Sachs

Yesterday, Goldman Sachs announced its gold price outlook for a second time in six weeks. The forecast update was provoked by expectations for US economic growth pick up and recently weaker gold performance. The bank trimmed its 2013 average gold price forecast from $1,610 to $1,545 per ounce. The 2014 price projection was reduced from $1,490 to $1,350 an ounce. Gold prices haven’t changed much over the past month, despite renewed risk aversion in the Euro block and the disappointing US economic data. Therefore, Goldman Sachs believes that now the gold holding persuasion is fading rapidly. Goldman also noted that even a faster slump may occur.


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