BNP Paribas on Tuesday cut its gold price forecasts for 2012 and 2013 saying the precious metal could be vulnerable to further episodes of price correction due to uncertainty in global markets.

BNP expects gold to average $1,775 per ounce in 2012 and $2,150 per ounce in 2013, compared with its previous view of $2,025 and $2,280, respectively.

The bank, however, retained its positive view of the gold price and expects it to reach new highs in 2012 and 2013.

BNP also cut its 2011 and 2012 price forecasts for silver, platinum and palladium.

The bank now sees silver averaging $35.75 per ounce in 2012 and $49.75 in 2013. It expects platinum to average $1,610 per ounce in 2012 and $2,130 in 2013, and expects palladium prices to average $725 per ounce in 2012 and $1,065 in 2013.

"The deepening of the sovereign crisis in Europe since mid-year has had a profound impact on investors' risk appetite and there has been widespread liquidation across assets," BNP said.

Gold prices rose to their highest in nearly a week on Tuesday as the euro rallied 1 percent versus the dollar.

Spot gold was trading up 1.44 percent at $ 1615.3 per ounce at 18:52 GMT and spot silver was trading up 2.47 percent at $29.47 at 18:52 GMT. (Reporting by NR Sethuraman in Bangalore; editing by Bob Burgdorfer)