UBS downgrades gold outlook for 2017 and 2018

The investment bank UBS has downgraded its outlook for the yellow metal for this year and the next citing three reasons.

Firstly, according to UBS the pick-up in gold interest was slower than expected as investors are including gold in their portfolios as a diversifier, not as an investment. Investors are not taking any meaningful positions in gold as the yellow metal hovers below key psychological and resistance level.

Secondly, they cited hawkish Fed as a factor weighing on gold, keeping investors reluctant to add gold in their portfolios.

Thirdly, UBS expects that the higher yields in the Eurozone would weigh on the gold more, as the economic data improves and political uncertainty clears.

UBS has downgraded their gold forecast for 2017 to $1300 per troy ounce from the previous estimate of $1350 per troy ounce and for 2018, $1325 per troy ounce, down from $1450 previously.

We at FxWirePro has forecasted $1365 per troy ounce as the next target for gold.