Bank of America Merrill Lynch expected that the gold prices to average $1294 an ounce next year.
The bank forecast that gold will average $1,294 an ounce over the next year, listing a first-quarter average forecast of $1,250 but a rise to a $1,350 average in the fourth quarter.
Bank of America Merrill Lynch said it looks for gold to underperform platinum and silver. Gold could slide on further liquidation of existing positions. The Fed, which has been accommodative with ultra-loose monetary policy, will eventually tighten its monetary policy, and with higher opportunity costs, gold will find headwinds.
“In our view, upside remains limited for now, in part because none of the concerns that brought investors to the market post-recession materialized – for instance, inflation remains low and USD has not debased. Also, the tighter monetary policy in the U.S. and rising rates are hanging over the market and could push gold towards $1,100/oz in 2014.”