UBS sees gold at $1,100 by February

The gold price on Tuesday hovered around breakeven following last week's slump trading at $1,242 an ounce.

The metal is down 5.2% so far in November and is now changing hands for over $500 less than this time last year.

Swiss bank UBS on Tuesday forecast further downside in the gold price lowering their one month price target to $1,180 an ounce and adjusting downwards the three-month prediction to $1,100, reports Kitco News:

Joni Teves, UBS analyst, said their revision focuses on three points. First, gold sentiment is much weaker than initially thought as evidenced by gold’s inability to rise even in the face of U.S. dollar weakness. Second, market participants are focusing on the expected tapering of the Federal Reserve’s quantitative easing program, and third, physical buying is subdued, with buying less seasonal this year and Indian buying curbed by the restrictions placed on the market by the country’s government and central banks.

Gold last traded below $1,200 an ounce at the end of June this year, a more than three-year low. The last time gold touched the $1,100 level was March 2010.