JP Morgan has lowered its 2015 and 2016 average gold and silver price forecasts on reduced demand from investors and consumers

The broker reduced its 2014 gold forecast by two percent to $1,275 per ounce because these key supportive factors have been underperforming throughout the year.

“While seasonal, physical buying emerged in Asian markets in September after a drop in price, many headwinds strengthened at the same time,” it said.

“The Asian gold consumer – a major supportive factor last year – proved to be very price sensitive and has been unwilling to step into the market at prices above $1,260,” it added. “Gold investors, in both Western and Asian countries, have also been largely absent from the market for the majority of this year.”

The bank also revised its forecast for 2015 four percent lower to $1,220 per ounce, citing lower inflation, reduced inflation expectations, higher US interest rates and a stronger US dollar.

The spot gold price was last at $1,146.50/1,147.30 per ounce, up $3.30 on Wednesday’s close, with the dollar at a near-two-year high against the euro at 1.2422.

The bank also downgraded its silver price forecasts for both 2014 and 2015 – it now sees silver averaging $19.56 per ounce this year, down five percent on the previous forecast of $20.52. It also forecast silver to average $18.25 in 2015, down 12 percent on its previous prediction of $20.75.

Silver bottomed out at $15.39/15.43 per ounce earlier, just above the low of $15.15 it hit yesterday, which was the lowest since February 2010.