Friday, May 10th 06:22 PM IST

Deutschbank, BNP Paribas cut Gold outlook

# BNP Paribas  # gold forecast  # Deutschebank  

The bank lowered its 2013 gold outlook 6 percent to $1,533 from $1,637. It downgraded its 2014 gold outlook by 17 percent to $1,500 and its 2015 gold outlook by 25 percent to $1,450.

BERLIN(BullionStreet): Deutschbank on Friday cut its forecast for gold prices in 2013, 2014 and 2015.

The bank said sharp price correction in gold last month prompted the action. The bank however upgraded it's US dollar outlook.

The bank lowered its 2013 gold outlook 6 percent to $1,533 from $1,637. It downgraded its 2014 gold outlook by 17 percent to $1,500 and its 2015 gold outlook by 25 percent to $1,450.


The bank expects gold's use as a hedge against currency debasement to fade amid anticipated strength in the US dollar vis-a-vis other currencies.

It also listed subdued inflation as a factor behind the downgrade. "With expectations that the US Fed ends QE by the end of 2013 combined with some recent disappointment in indicators for global growth from China, Europe and the US, and the prospects for inflationary fears to diminish further is quite high in our view," it said.

Meanwhile, BNP Paribas also cut its outlook on gold prices for this year and next, but said it expects the metal to trade back above $1,600/oz in six months.

The bank now sees gold averaging $1,580 a troy ounce this year, down 5% on its previous forecast. In 2014, it expects gold to average $1,520/oz, also down 5% on its earlier outlook.

BNP Paribas' downgrade was prompted by gold's recent rout, which saw the metal tumble more than $200 in the space of just two trading sessions in mid-April.

Since hitting a more than two-year low at $1,321.50/oz on April 16, the price of gold has recovered some 10%, but still trades 13.5% lower on the start of the year, at $1,449.20/oz.

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