A poll of 35 analysts and traders conducted this month forecast an average gold price of $1,301 an ounce in 2018 and $1,325 in 2019, from predictions of $1,334 and $1,352 respectively in a similar poll three months ago.
The revisions come after gold plunged from $1,365.23 in April to around $1,220, under pressure from a strengthening dollar, expectations of higher U.S. interest rates, a large decline in gold held by exchange-traded funds and a sell-off by speculative investors.
The stronger dollar makes gold more expensive for buyers with other currencies, while higher interest rates increase the opportunity cost of holding non-yielding bullion.
Poll respondents said the selling was overdone. “Gold should build a bottom over the coming months,” said Julius Baer analyst Carsten Menke.
“Medium to longer-term upside should materialise once growth and inflation concerns creep into financial markets, reviving safe-haven demand,” he said.