Gold analysts are more bearish than at any time since 2002 and expect an average price of $1,219 a troy ounce this year, according to a survey of industry forecasts by the London Bullion Market Association (LBMA).

The modest forecast price – lower than the spot price of $1,240 on Tuesday afternoon – is a reflection of the dismal recent performance of the yellow metal. After 12 consecutive years of price rises, gold tumbled nearly 30 per cent in 2013 amid a sell off in gold-backed exchange traded funds.

Investor pain was matched by analyst red-faces. A year ago, all but five analysts polled by the LBMA predicted that gold would average more than $1,700 for the year. The lowest forecast was $1,600, by René Hochreiter, of the South African advisory firm Allan Hochreiter, and Eddie Nagao of Sumitomo. The average price for gold in 2013 was $1,411.

Explaining their caution this year, analysts cited a possible strengthening of the US dollar, an oversupply of gold and potential further ETF sales. Weak inflationary pressure was another concern, since gold is viewed by investors as an inflation hedge. Continued strong demand from China, one of the few bright spots for gold in 2013, and a possible relaxation of import duties in India, could support prices.

The most bearish of the 28 analysts in the 2014 poll, Tom Kendall of Credit Suisse, reckons gold could drop to a five-year low of $950 this year, with an average price of $1,080. More than a third of those surveyed believe the average price this year will be $1,200 or lower. At the top end, Wolfgang Wrzesniok-Rossbach, of German bullion dealer Degussa Goldhandel, see prices reaching $1,480, with an average of $1,315.

The range between the highs and lows in the forecasts is also more modest than in previous years, when prices were soaring. From $276 at the start of 2002, gold reached a high of $1,920 in 2011, and stayed strong the following year. Throughout that bull run, analysts who participated in the annual LBMA surveys correctly predicted that the average gold price would rise.

The metal has enjoyed a decent start to 2014, rising about 3 per cent. But Philip Klapwijk, of Precious Metals Insights, said this was in fact disappointing, given the lead-up to Chinese New Year, when purchases are usually strong.

“I would have thought gold would have gone to $1,350 this month,” Mr Klapwijk said.

He expects the price to fall below $1,180 – a level where it has previously enjoyed support – in the coming months.

The outlook for other precious metals is mixed, the LBMA poll suggested. Silver, which fell 36 per cent last year, is expected to stay flat at an average price of $19.95. Analysts think platinum will average $1,490 in 2014, 6 per cent higher than the price at the start of the year. Palladium could see a similar percentage rise, according to the LBMA poll.

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