Analysts have sharply scaled back expectations for gold prices this year after the metal's weak fourth-quarter performance, with the prospect of further US interest rate hikes and a bumper year for stocks weighing on interest in the metal.
Gold is expected to edge up from current levels in 2017 as uncertainty over the Trump administration, Brexit, and a raft of European elections fuel buying, but overall prices should only match last year's level.
A survey of 35 analysts and traders conducted this month returned an average gold price forecast for the year of $1,250 an ounce, above its current $1,190 an ounce but little changed from last year's average of $1,248.
A similar survey conducted three months ago returned an average price forecast for 2017 of $1,331 an ounce.
Confidence in the metal, which rose 8.5 percent last year after three straight years of losses, has since been hurt by expectations that US President Donald Trump will lift spending and cut taxes to fuel growth, boosting cyclical assets at gold's expense and supporting the case for further rate hikes.
"Although there will be some safe-haven demand associated with Trump and Brexit, we think further appreciation of the US dollar and Fed interest rate hikes will be more powerful determinants of direction," Capital Economics analyst Simona Gambarini said.
"We expect the Fed to tighten four times this year."
Gold is highly sensitive to rising US interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
Physical gold demand is also likely to remain under pressure after falling 20 percent last year, in part due to the impact of higher prices, but also due to a cash crunch in major consumer India, where consumption fell to its lowest since 2003.
Next year, gold is tipped to resume its upward path, rising to $1,300 an ounce, its highest annual average since 2013.
Silver prices are forecast at an average $17.70 an ounce this year, above their current $16.85 an ounce and 3.5 percent higher than last year's average of $17.09 an ounce.
That prediction falls well short of a forecast delivered three months ago of $18.90 an ounce, however, reflecting lower expectations for gold prices.
"We expect silver to follow in the footsteps of gold without the China and India headwinds," Standard Chartered analyst Suki Cooper said.
"Concern over weak industrial demand suggests a soft footing for silver and in turn continued volatility in price action. But silver's fundamentals look to be relatively price supportive."