Get ready for lower gold and silver prices! That is what Deutsche Bank A.G. (NYSE: DB) is telling its clients to expect in 2013 and in 2014. In a research note on Tuesday, Deutsche Bank cut its 2013 average gold price by almost 12% to $1,637 per ounce and lowered its forecast for 2014 by almost 5% to $1,810 per ounce.
Keep in mind that while these are lower price targets on gold, this is actually above the current price of gold. The real big lowered expectations came in the devil’s metal. Silver is projected now to be 16% lower from its prior targets, down to $31 an ounce for 2013, while 2014 projections were cut by 10% to $34 per ounce.
Deutsche Bank sees continued strength in the U.S. dollar and economic forecasts of rising gross domestic product. The long and short of the matter is that gold is expected to struggle to reach much interest, compared to other assets, with the developing currency trends the way they are today. A rising dollar also hurts the value of gold and silver if other things are static.
Note that Deutsche Bank did not just pick on gold and silver. The firm sees weakness in copper, zinc, aluminum and nickel as well.
So far we are seeing the key ETFs ignore this note. A look at Kitco.com spot prices shows gold up at $1,589 and silver up 2.7% at $28.10. Maybe the gold bugs and silver bugs think it is time for that countercycle bounce that Bank of America Corp. (NYSE: BAC) was calling for. SPDR Gold Shares (NYSEMKT: GLD) is up 1% at $153.72, and iShares Silver Trust (NYSEMKT: SLV) is up almost 3% at $27.07.