Swiss investment bank UBS has downgraded its one- and three-month forecasts for gold in expectations of a sustainable global economic recovery, especially in the US. The bank expects gold prices to average $1,550 in the next one month, almost 13 per cent lower from a previous forecast of $1,775 per ounce, while it has lowered its three-month forecast by an even steeper 18 per cent, from a previous forecast of $1,950 per ounce to $1,600 per ounce. Spot gold prices fell to around $1,650 per ounce again this morning on signs of a sustainable economic recovery in the US and around the globe. The yellow metal was trading at $1,654 per ounce at 1pm UAE time (9am GMT) after recovering from a low of $1,642 per ounce last week. Last week, in its budget for fiscal 2012-2013, India, the world’s largest gold buyer, doubled the tax on gold imports, from 2 per cent to 4 per cent, after record purchases widened the country’s current account deficit. This was the second increase this year, with the previous increase on January 17 also witnessing a doubling the tax on gold and silver, with India imposing a levy on imports as a percentage of the price, compared with the previous system of tax by weight. In his budget speech, Indian Finance Minister Pranab Mukherjee squarely blamed a 50 per cent increase in gold imports in the previous three quarters for the country’s ballooning deficit. “One of the primary drivers of the current account deficit has been the growth of almost 50 per cent in imports of gold and other precious metals in the first three quarters of this year (fiscal 2011-2012),” Mukherjee was quoted as saying. “I have been advised to strengthen the steps already taken to check this trend,” he added. Gold prices are down more than 7.5 per cent since hitting a three-month high of $1,790 on February 29. 2012. With global economy showing signs of stabilizing, and concerns abating on a fully-fledged European debt crisis, gold seems to be losing a bit of its safe haven appeal and investors are seemingly opting for riskier asset classes, including equities.