Societe Generale lowered its forecast for the average price of gold and silver for 2013. The bank cited the recent weakness in gold prices and a “lack of bullish triggers.”
The bank cut its forecast for the average gold price by 5.6% to $1,700 a troy ounce from its previous forecast of $1,800/oz. It cut its forecast for the average silver price by 8.8% to $31/oz from $34/oz.
However, the physical market has already responded “positively” to the price fall with bargain hunting appearing in a number of physical purchasing regions and keeping gold prices relatively stable and away from free-fall.
Ahmedabad market has gone to a small premium over international prices, with dealers expecting a fresh surge in buying into recent price weaknesses.
Also, turnover on the Shanghai Gold Exchange soared to a record 22 tons M, adding the daily average turnover volume was 8 tons last year.
Gold futures finished lower Wednesday, pulling back after a sizable gain in the previous session, as a stronger dollar and a climb in U.S. equities lured some investors away from the precious metal.
Gold for February delivery finished down $6.70, or 0.4%, to settle at $1,655.50 an ounce on the Comex division of the New York Mercantile Exchange.
The precious metal had jumped $15.90 an ounce, or 1%, to settle at $1,662.20 on Tuesday, amid signs of increased demand in Asia.
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