The average London morning fix in the first six months of the year was $279.36 an ounce.

The poll conducted in the last two weeks of July found that the beleaguered bullion price will average at $267.56 an ounce for the full year, 9.2 per cent down on the $294.70 forecast in a Reuters poll in January 1999.

Seventeen analysts submitted forecasts for the full year while 15 made forecasts for the second half of 1999.

Most analysts said gold's future remained bleak with the International Monetary Fund and central bank sales of gold reserves overhanging the market.

``I am very firmly of the view that if gold stays at current levels or sinks lower, there is going to be a strong supply side response, that is, closures and corporate stress,'' said a resource analyst, Greg Foulis, at Deutsche Bank Australia.

The analysts expected gold prices to lift slightly towards the end of the year, averaging $262.00 a troy ounce at the end of the fourth quarter from an average of $255.69 at the end of the third quarter of the year.

The bullion market remained shaken by Britain's decision to sell more than half of its gold reserves -- a process which began on July 6 with the sale of 25 tonnes of gold - and plans of official sector sales from the IMF and Swiss National Bank.

``There is little doubt that the debate on the moral and logistical merits of official sector sales will continue to surround the market in the next six months,'' said metals analyst Rhona O'Connell of T Hoare Canacord in London.

The bullion market will continue to focus on the expected sales from official reserves said assistant manager, Masahiro Arai from precious metals section at a major Japanese bullion house Tokuriki Honten Co Ltd.

``The focus would be whether the market will be able to overcome the impact from expected sales by Switzerland and the IMF. If it doesn't, the market will undergo a fundamental change. The basic price range would come down to around $200-$300,'' Arai said.

Gold has traded in a range between $252.00 and $258.00 since early May when Britain announced gold sales.

Vice- president of equity research at Lehman Brothers in New York, Peter Ward, said the risk for the gold price remained on the downslide.

``I'm concerned on the one hand that $250 gold isn't causing enough pain to cause significant mine-production cutbacks and on the other hand it's really not stimulating the price-elastic response you would expect from the demand side either,'' Ward said.

But some analysts were bullish despite gold's woes.

``In the face of massively negative sentiment, we remain unrepentant bulls. Indeed, the longer prices remain entrenched at historically low levels the more convinced we are that the rebound - when it comes - will be more explosive than our 2000 estimate of $350 per ounce suggests,'' said Salomon Smith Barney.

Kamal Naqvi,precious metals analyst at Macquarie Equities Ltd in London said although gold remained under pressure to head lower with $250.00 an ounce looming, there were some hope of short-covering rallies which could lift prices.

``At the end of both (third and fourth) quarters, we have potential rallying points. The first being that the IMF decision on selling gold is scheduled for the last week of September, and there is increasing possibility and almost probability that this will be rejected or delayed by the US Congress.

``And at the end of the year we have potential for uncertainty, particularly given recent lease rate activity, of some type of short-covering rally in connection with the Y2K problem,'' Naqvi said.

Analyst at Socgen Frankel PollakAngus, Auchterlonie, in Johannesburg agreed:

``If the IMF sale gets resoundingly blocked, either by the US Congress or other means, that will give us a positive signal. Gold has been oversold and a lot of the technicians are saying we should be looking for a recovery.''

Keith Goode, resource analyst at Bell Resources in Sydney said gold was unlikely to move much away from the $250.00 level unless central banks changed their minds.

``I think you are going to see lots of (mine) closures, but I don't know whether they are going to affect the price because it is not a supply/demand situation, it is a sentiment story.

``People say `we have these closures in copper and the copper price goes up,' (but) the point is there is not a central bank of copper.''