NEW YORK (Scrap Register): Canadian bank CIBC looks for gold to weaken into year-end since the U.S. Federal Reserve expected to maintain monetary-policy tightening for now.

"We haven’t been a fan of gold in a rising rate environment, but concede that the weakness seen in the U.S. dollar - along with the general upturn in metals prices—has acted as a stronger-than-expected catalyst for prices," said the Canadian bank.

However, with the Fed continuing to eye a hike before the end of the year, the market is still underpriced for Fed tightening, and therefore may be overstating the room for further U.S. dollar depreciation ahead.

Indeed, gold prices have been particularly sensitive to the expected path of U.S. short rates and another hike by the spring of next year from Yellen and Co.

“We could see bullion drop to levels that are closer to $1,250/oz. That’s currently our year-end target for 2018, and we have a further move lower to $1,225/oz by the end of 2019 penciled in, as the prospect of a modestly higher rate environment—and a still-benign inflation environment—diminishes the appeal of a non-yielding asset like gold. Silver could fare a bit better, given its less dollar- and rate-dependent nature," CIBC added.