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 futures for June delivery have traded sideways during May, losing about a quarter of a percent. Since the beginning of the month, the yellow metal has traded at a high of $1,315.80 and a low of $1.272 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%.