Gold for February delivery at the COMEX division of the New York Mercantile Exchange was up $3.90 to close at $1,229.40 an ounce. The gold price traded as high as $1,230.90 and as low as $1,222.80 an ounce, while the spot price rose $2.61, or 0.21%.
Bank of America in a research note said it lowered its gold forecast by 11% to $1,150 an ounce: "While index rebalancing may support gold until 14th January, we see limited support to prices beyond that. Our continued bearish view is driven by the challenging macro-economic environment, which is best captured by rising US 10-year rates and a persistent lack of inflation pressures."
Barclays said in a research note that gold would test 2010 lows during 2014: "Absent a shift in sentiment, we believe risks are skewed to the downside given the potential for hedging; slowing physical demand; and, most important, a macro backdrop of modest growth, fewer tail risks, and a stronger dollar increasing the scope for further disinvestment."
Gold ETF SPDR Gold Trust (GLD) was up 0.31% to $118.48.
-- Written by Joe Deaux in New York.
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