NEW YORK (TheStreet) -- The biggest positive right now for gold is that investors aren't even bothering to buy it.
In a note Tuesday morning to clients, UBS strategist Edel Tully and analyst Joni Teves downgraded their one-month and three-month gold forecasts, but said that limited investor interest in the yellow metal suggests that prices won't tumble materially lower. In other words, though UBS is lowering expectations, the bank expects gold to trade up and down in a tight range.
"Gold is not on the radar for many, and with broad expectations that prices will be range-bound this year, many investors are opting to stay out of this market," UBS wrote. "That is probably gold's biggest positive right now."
UBS said the negative factors contributing to its downgrade of the precious metal include a stronger U.S. dollar amid expectations that the European Central Bank in June will cut rates, anticipation of more gold-backed ETF outflows, improving U.S. jobs data and overall weak sentiment toward the market.
The bank downgraded its one-month gold forecast to $1,250 from $1,280 an ounce, and its three-month forecast to $1,300 from $1,350 an ounce.
Gold for June delivery at the COMEX division of the New York Mercantile Exchange was dipping $5.10 to $1,290.70 an ounce. The gold price traded on Tuesday as high as $1,298.80 and as low as $1,289.10 an ounce, while the spot price was adding $5.60, or 0.43%. -- Written by Joe Deaux in New York. >Contact by Email. Follow @JoeDeaux
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV