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JP Morgan and UBS have raised their expectations for the Gold price downwards. Switzerland's UBS lowered its price target for the next thirty days from $1,250 to $1,180 per troy ounce, but at the same time left the price target for the next three months unchanged at $1,200. The bank also lowered its estimate of the average gold price this year from $1,270 to $1,230 per troy ounce. The target price of an average of $1,200 per troy ounce for 2015 remained in place, but that does not mean that the decline in the gold price is over, according to UBS analysts.
"The sharp appreciation of the dollar following the Bank of Japan's announcement of additional monetary stimulus has dealt a severe blow to gold. But the weak sentiment towards gold is mainly due to the strength in the dollar. In addition, liquidity in the gold market was limited, which allowed for an exaggerated fall in prices.", the bank writes in its market update.
According to UBS, the price of gold has been too fast and too hard lately Dropped. From its peak in October, the price has slid $124 per troy ounce with no internal or fundamental justification for doing so, the bank added. Still, due to the negative sentiment and weaker demand for gold in China, the bank does not rule out the possibility that the gold price will fall towards or below $1,100. They expect that the price of gold cannot stay below a level of $1,100 per troy ounce for long, as new buyers will enter the market at that price level.
The American JP Morgan Reduced Also the price targets for gold and silver. For 2015, the bank expects gold prices to average $1,220 per troy ounce, a decrease of 4% compared to the previous price target. Gold investors in both the West and Asian countries have failed this year, the bank notes. Falling inflation, lower inflation expectations, the strengthening of the dollar and the expectation of a rise in interest rates in the US do not make the outlook for 2015 much better, according to JP Morgan. Nevertheless, the price target for 2015 shows that JP Morgan does not expect a large price drop either.
JP Morgan lowered its price target on silver for this year by 5% to $19.56 per troy ounce. For next year, it lowered the price target by 12% to $18.25. It is striking that these price targets are significantly higher than the current silver price. Silver recently hit a low of $15.15 per troy ounce, its lowest level since February 2010.
