Higher forecasts still cautious, UBS's 1-month target still below current gold price...
GOLD PRICE forecasts are being raised by some analysts but remain highly cautious after the metal began 2014 "going against" their bearish consensus.
"Gold has started to shed its stigma, if slowly," says Dr.Edel Tully, precious metals strategist at Swiss investment and London bullion bank UBS.
Becoming "either the favourite asset to short or ignore completely" in 2013, she says, there is now a shift on sentiment towards gold investment amongst
larger money managers.
Tully has revised the Swiss bank's 3-month gold price forecast from $1100 to $1350 per ounce. But while raising UBS's 1-month target from $1180 to $1280 – and with the current gold price at $1315 per ounce – "we're not inclined to chase the market higher here," she adds.
"Gold has caught out most market observers – ourselves included," says commodities analyst Edward Bell of the Economist Intelligence Unit
, the research wing of the weekly news magazine.
"The gold price is going against all the forecasts we had going into the first quarter," Bell told FastMarkets earlier this week.
Maintaining his bearish stance, "I just see this [rally] as a corrective move," says Robin Bhar, metals research head at Swiss investment and London bullion bank Societe Generale, speaking to Bloomberg.
The most-accurate gold price forecaster since 2012 in the news-wire's weekly survey
of market professionals, "We...still want to be bearish gold," he says, predicting that gold will average $1050 per ounce in the final 3 months of this year.
Calling the "biggest driver" a shift in sentiment amongst large investors, Tully at UBS now sees the gold price averaging $1300 across 2014 as a whole, up from her previous $1200 forecast.
"We make no changes to our 2015 forecast of $1200," Tully says.