Morgan Stanley, Goldman Sachs and UBS have all lowered their forecasts for gold on prospects that the US Federal Reserve will scale back monetary stimulus as the economy recovers.
Morgan Stanley cut its 2013 target to $US1409 ($1527) an ounce from $US1487, reduced its prediction for 2014 to $US1313 from $US1563, and trimmed its 2015 estimate to $US1300 from $US1450.
Analysts are cutting their outlook for gold as the precious metal heads for its biggest annual drop in more than three decades.
Bullion has fallen 23 per cent in 2013 after rallying for 12 years, slumping to the lowest level since September 2010 last week after Fed chairman Ben Bernanke said the central bank might slow its bond-buying program if the US economy continued to improve.
"With investor demand for safe-haven assets waning against the backdrop of a strengthening US dollar and rising US bond yields, market conditions for gold and silver have become markedly less favourable," Morgan Stanley analysts wrote.
The spot price of gold in Sydney finished at $US1282, up from Monday's close at $US1280.