Investors may have long forgotten the rebound in commodities last month as metals get pressured lower in June.
Bull investors face an uphill battle. Gold, silver and copper are all trading at multi-year lows.
And it could get worse. Goldman Sachs cut its outlook nearly 10 per cent for gold prices in 2013 to $1,300 per ounce and about 17 per cent in 2014 to $1,050 per ounce due to a brigher economic scenario in the U.S.
"Medium term, we expect that gold prices will decline further given our U.S. economists' forecast for improving economic activity and a less accommodative monetary policy stance," the bank said.
The Federal Reserve expects GDP growth for 2013 to be in a 2.3 to 2.6 per cent range and growth to pick up next year, somewhere in a 3.0 to 3.5 per cent range.
Goldman highlights the "fast-forwarding" of the Fed's monetary policy. Fed chairman Ben Bernanke hinted last week that he may scale back the Fed's quantitative easing program as early as this year. The Fed's monthly $85 billion bond-buying program has had a significant upward influence on gold prices.
Central banks have loaded up their bullion coffers in recent years, but this will not offset any tapering by the Fed, says Goldman Sachs.
The bank says gold prices should find long-term support at $1,200/oz. as low prices deter production and supply eventually shrinks.
Gold shed $18.00 to trade at $1,278.43 as of 1:40 pm ET.
Meanwhile, UBS trimmed its silver outlook for this year and 2014 as it behaves similarly to its precious metal cousin, gold.
The Swiss bank sees silver averaging $24/oz. this year, a 17.2 per cent drop from its previous forecast. In 2014, UBS predicts silver will average $25/oz., down 16.7 per cent from its earlier outlook.
Silver lost 49 cents to trade at $19.63 early Monday afternoon.
Amid these predictions was a 2.3 per cent month-over-month rise in Scotiabank's commodity price index in May, driven by a 9.9 per cent increase in oil and gas prices.
This follows a massive sell-off in gold that dragged the index lower in April. Still, the index is 1.9 per cent higher than its level a year ago.
"The decline in commodity prices from the April 2011 near-term peak - just prior to the negative economic fallout from excessive euro zone sovereign debt - has narrowed to -14.2% from -19.9% in late 2012," said Patricia Mohr, Scotiabank's vice-president of economics and commodity market specialist.
Western Canadian Select crude prices climbed to the highest level in 15 months, buoyed by a lower discount on West Texas Intermediate prices and an increase in rail shipments that took pressure off of pipelines between Canada and the U.S.
Mohr says bitumen demand should rise in coming months due as maintenance activity winds down at refineries in the U.S. Midwest.
The metals and mining sub-index fell 2.4 per cent in May. Most base metal prices dropped, while potash and cobalt prices rose. Copper bounced back after correcting sharply in April. Potash prices rose slightly as farmers in Asia and Brazil resist higher prices. Scotiabank expects a rally in uranium prices, which are near a cyclical bottom.
Forestry sector prices sunk 5.9 per cent in May as housing starts increased less than expected. Scotiabank expects a seasonal rally in lumber in late summer when construction picks up.
The agricultural sub-index shed 0.3 per cent as a seasonal decline in lobster prices offset higher grain and livestock prices. Scotiabank says the sub-index's performance will depend on weather in July and August.