Bank of America Merrill Lynch Tuesday cut its outlook on gold prices for this year and next, citing improving economic conditions and a rise in U.S. nominal rates.

The bank reduced its 2013 average price forecast for gold by 6.9% to $1,680 a troy ounce and its 2014 forecast by 9.8% to $1,838/oz. It now doesn't expect gold to break above $2,000/oz until 2014, a turnaround from its previous forecast for a move above $2,000/oz in the second quarter of 2013.