Editor's note: Catch the Latest Happenings with Kitco Video News!

Barclays Lowers Gold Price Forecast, Sees 2013 Average Price Of $1,646

By Kitco News
Thursday March 14, 2013 3:14 PM

(Kitco News) - Citing “investor fatigue,” Barclays lowered its 2013 average gold price forecast to $1,646 an ounce, the firm said on Thursday.

“We have revised lower our gold price forecast, as the downside risks to the outlook have risen while the upside catalysts have receded. There is scope for gold to gain traction, given the forthcoming debt ceiling debate, but investor fatigue has weighed upon prices,” the bank said.

Gold prices are likely to remain in a range, with support coming from physical demand and the low interest rate environment, but the upside is likely to be capped unless the market can find a new catalyst, they said.

Barclays said physical buying, particularly in China, responded to the lower gold prices and is providing solid support.

The biggest risk that gold faces is what exchange-traded fund investors do, Barclays said. ETF investors have sold shares, with outflows reaching 111 metric tons across the physically backed funds.

“There are two indicators that may shed some light on whether outflows will continue. First, the months in which previous hefty net redemptions have materialized correlate with moves below $1,600, suggesting an element of price sensitivity. Second, equity market price action has, on occasion, had a stronger relationship with flows, with the recent rally in equity markets hampering interest in gold,” they said.

By Debbie Carlson of Kitco News dcarlson@kitco.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Precious Metal Charts

Click to see this Precious Metal chart
  1. 24h
  2. 30D
  3. 60D
  4. 6M
  5. 1Y

Interactive Chart