Gold prices may not be as high as in the past, but Swiss Bank UBS looks for gold to average just about $1,350 in 2017, noting that gold may be down, but not out.

In fact, a research report coming from Swiss Bank UBS notes that gold will be a fragile commodity in the beginning quarter of 2017. Gold might even fall to around $1,150 at this point.

A statement from UBS clarifies its position on expected gold pricing at the end of 2016 and in 2017. Given that the market is already down and positions have been adjusted accordingly, UBS believes that any further downsides to owning gold are likely to be well contained, and that buyers shouldn’t expect much further decline.

In fact, UBS believes that gold is looking like an attractive proposition for buyers at these levels because too much further weakness isn’t likely. As prices go up, buyers who get in at this point will be making considerable gains on their investment.

Just three months ago, gold was forecast at $1,300. While that might appear a bit ambitious at this point, UBS believes that gold will make its way back to that mark in the very near future. That’s why they’re saying gold may be down, but buyers shouldn’t put it down for the count yet. This thinking is mostly based on an analysis of real interest rates that take into account the yield on traditional 10-year note government bonds once inflation is removed from the equation.

UBS also believes that a scenario which shows a compression in real interest rate yields could be positive for gold buyers. If the opposite happens, UBS is still concerned that a rise in real yields could negatively impact the price of gold in future months.

UBS also expects silver to average around $18.60 for 2017, which is stronger than in recent weeks, when prices peaked around $16.50. While UBS believes silver will reflect price movements in gold, gains in silver may be more related to needs for industrial component production. Still, this growth should help shore up gold prices and put the gold market on an upswing.

In short, UBS is optimistic about gold pricing and it still recommends investors buy. For buyers looking to diversify a portfolio, gold is still an excellent option unless real interest rates push higher in 2017.