Gold built on the rally that last week saw the best gains for the metal in almost two years.
Spot gold was US$3.13 higher at US$1,283 as some hedge funds took a bet that the US Federal Reserve may not start tapering its bond buying programme as soon as expected.
Unexpectedly benign comments from Fed chairman Ben Bernanke sparked last week’s recovery as the dollar weakened.
Bernanke’s remarks may indicate the Fed starts to taper in December rather than September as has been widely predicted said traders.
Even so, Citigroup has been one main bears of the gold price and today cut its price forecasts again for next year and the year after.
The prospects for early tapering by the Fed sent gold and silver tumbling in the first half of 2013 and the broker expects this price weakness to persist.
As a result, it has cut its gold and silver prices by 20% and 31% respectively for 2014 and by 7% and 16% in 2015.
Citi now expects gold to average US$1,358 this year, US$1,145 in 2014 and US$1,250 in 2015. Silver is now forecast to average US$23 this year, US$18 in 2014 and US$20 in 2015.
The broker also has an underweight stance on the gold and silver miners with sells on African Barrick Gold, Petropavlovsk and Hochschild Mining.
Spot silver today was down slightly at US$19.87, while platinum added US$7 at US1,410.
Major movers
Randgold Resources down 73p at 4,320p
Fresnillo down 15p at 966p
Anglo American up 5p at 1,300p