HSBC cuts gold, silver price forecasts for 2013, 2014
REUTERS - HSBC lowered its gold forecast for this year and next on Friday, saying the recent tumble in prices for the yellow metal has dealt a severe blow to investor confidence, which may take many months to restore.
The bank cut its 2013 gold price forecast to $1,542 per ounce from $1,700 and the 2014 price outlook to $1,600 per ounce from $1,720.
The bank, however, expects gold prices to stabilize after the recent rout as retail demand for gold lends support with rising jewelry and gold coin purchases from Asia.
"Lower prices attract greater buying, especially in India and China. Based on the fragmented nature of this buying, it may take months for this new demand to feed into prices," HSBC analyst James Steel said in a note.
HSBC also cut its 2013 silver price forecast to $26 per ounce from $33 and the 2014 price outlook to $27 per ounce from $31 earlier.
The bank said factors limiting price appreciation for silver were likely to be growing mine output.
Mine production has increased steadily for more than a decade and continues to grow, notably in Latin America and China, the bank said.
(Reporting by Shrutee Sarkar in Bangalore; Editing by Kenneth Barry)
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