Deutsche Bank has cut its gold price forecast by up to 22 percent, amid growing investor caution over the outlook for US monetary policy and declining investment demand for the precious metal.
According to the revised forecasts, the bank is targeting a price of $4,300 per ounce in the third quarter and $4,800 in the last three months of the year, down more than a fifth and 17 percent respectively compared to previous estimates.
Gold has fallen by about 12 percent so far this quarter, with the Federal Reserve's repricing of expectations, along with robust US economic data, playing a key role in pushing prices down.
This more cautious forecast from Deutsche Bank follows a similar move by Goldman Sachs last week, which lowered its year-end gold price forecast by $500 to $4,900 an ounce, as it now does not expect any interest rate cuts by the US Federal Reserve this year.
At its most recent interest rate meeting, Federal Reserve officials opted to leave monetary policy unchanged, but indicated growing support for raising rates. Meanwhile, the new chairman, Kevin Warsh, pledged to restore inflation stability.
According to Bloomberg News data, the spot price of gold fell by as much as 1.9 percent to just over $4,111 an ounce on Tuesday. After hitting a record high near $5,600 an ounce in late January, prices have fallen by about 5 percent since the beginning of the year.
