On Tuesday, analysts at J.P. Morgan Cazenove lowered gold, silver forecasts. The outlook for gold in 2013 was cut to $1,595 an ounce from $1,745 expected previously. In the short term, the analysts slashed the gold outlook by 18% to $1,450 in the second quarter, while lowering the 2015 forecast by 5% to $1,650 an ounce. For silver, the 2013 forecast was cut to $27.89 an ounce from $30.01.
Bank of America also have trimmed their gold, silver forecasts. Analysts at the bank see gold average at $1,478/oz this year, 12% below previous expectations. They estimate silver averaging $24.40/oz, 25% less than previous forecast, and could fall below $20/oz in the coming months.
Gold for August delivery lost $7.80 to $1,379.70 an ounce in Tuesday’s trading session on the Comex division of the New York Mercantile Exchange. Silver for July dropped 23 cents to $22.27 on ounce.
The market saw pressure from a strong rally in equities, an advancing dollar and the reductions to gold price forecasts, but also managed to find some support from what analysts saw as an “oversold” condition.
Gold futures have oversold the physical bullion markets pushing up premiums for bullion and coins. At the same time, a bearish pressure from a strong equities rally, advancing US dollar, better-than-expected economic data and gold silver forecast reductions from some banks add to the selling pressure.
