LONDON: HSBC lowered its gold price outlook for this year and next, citing weakness of the yellow metal year primarily due to negative sentiment on investor expectations the U.S. Federal Reserve would curb its quantitative easing (QE) program.
The bank cut its 2013 gold price forecast to $ 1,700 per ounce from $ 1,760 and the 2014 price outlook to $ 1,720 per ounce from $ 1,775.
HSBC, however, said it remains bullish on gold and expects prices to be supported by ongoing accommodative monetary policies, including QE, and an increased tolerance for inflation risk by global policymakers.
It expects a recovery in gold prices from its current levels as the year continues.
"Later in 2013, we expect monetary easing, escalating currency wars, and geopolitical tensions to support gold prices up to $ 1,800/oz," HSBC analyst James Steel said in a note.
"Increased inflationary expectations should buoy gold."
The gold price drop below $1,600 per ounce may stimulate jewelry, coin, and small-bar retail demand in price-sensitive economies, HSBC said.
HSBC cuts gold forecast, sees recovery later in 2013
HSBC cuts gold forecast, sees recovery later in 2013
