Gold price continued to slump for the third consecutive month in April, and a sharp decline in demand from India, the world’s largest gold consumer, bodes ill for the yellow metal’s fortunes. That factor, coupled with improved economic data released by the US Federal Reserve yesterday, influenced major bullion bank HSBC to cut its average gold price forecasts for 2012 and 2013. The bank cut its 2012 price forecast by 5 per cent to $1,760 per ounce from $1,850/oz and 2013 price forecasts to $1,775/oz from $1,800/oz. This is the second time that HSBC has slashed its gold price forecast this year, with the bank earlier slashing its price forecast from $2,025 an ounce to $1,850/oz in early January on a weak euro, liquidation related to equities’ losses and lacklustre physical demand from emerging markets. With the world economy slowly but surely emerging out of the financial mess it dug itself in, most major economies (barring those in the Euro Zone) are well on track to recovery, a fact that diminishes the safe haven appeal of gold, and encourages investors back into riskier assets like equity. The precious metal has failed to rally this year despite the fact that bond yields in some of the euro zone’s economies are soaring to unsustainable levels, and the economies of countries like Spain have now officially slipped back into recession. At $1,664 per ounce this morning (10am UAE time, 6am GMT), gold is more than 13 per cent below its all-time high of $1,920/oz that it made in September last year, and analysts now believe that the elusive $2,000/oz-mark will not be challenged this year or the next. Nevertheless, despite painting a bleak outlook, HSBC’s chief commodity analyst James Steel noted that gold price could see a reversal of sorts in the second half of the year. “Despite recent weakness, we maintain an upwards bias for gold and expect prices to recover in the second half of this year,” he said in a note to clients. On the other hand, analysts at Bank of America and Goldman Sachs continue to believe that the recent positivity in US economic data may not last long, and that gold will benefit from any future economic weakness. Commenting on the GDP data, analysts at Bank of America noted that nearly half the growth came from auto production that is “unlikely to repeat in future quarters.”  The firm added that “the soft nature of today’s GDP report reinforces our below consensus growth outlook.” Goldman Sachs analysts too maintain a cautious outlook on US economy, and recently said that expected weakness in the forthcoming quarters hold positive implications for the gold price, especially if the Fed resumes its quantitative easing programme. Analysts at the firm expect the price of gold to resume its ascent “as subdued US growth reduces the market’s expectations of real rates and perhaps, most importantly and counter to much of the current market feeling, suggests that the anticipated North American growth slowdown will see a return by the US Fed to some form of quantitative easing.” Goldman reiterated its gold price target of $1,840/oz, but that makes it clear that the earlier forecasts of gold at $2,000 per ounce aren’t going to be met in a hurry.