Morgan Stanley lowered its 2013 target for the yellow metal to USD 1,409 per ounce from USD 1,487 per ounce, while for next year the forecast was cut to USD 1,313 per ounce from USD 1,563 per ounce. Morgan Stanley also cut its gold outlook for 2015.
A stronger dollar also dimmed the appeal of the yellow metal as an alternative asset. A stronger greenback makes the bullion more expensive for those holding other currencies, thus weighing on demand.
At the MCX, Gold futures, for the August 2013 contract, closed at Rs 26,559 per 10 gram, down by 0.62 per cent, after opening at Rs 26,666, against a previous close of Rs 26,725. It touched an intra-day low of Rs 26,512.