The price of gold is poised to retreat 1.8 percent this year as demand may decline if instability in global financial markets eases and consumption drops, Australia’s Bureau of Resources and Energy Economics said.

Prices may average $1,638 an ounce in 2013, down from $1,668 a year earlier, the Canberra-based bureau said in a report Wednesday. That compares with a December forecast of $1,738 for 2013.

Global mine production may increase to 2,956 tons in 2013 from 2,836 tons last year, the report said. World fabrication consumption, which includes jewelry, electronics and coins, may decline 1.3 percent to 2,580 tons in 2013, it said. Central banks may purchase 550 tons in 2013, compared with 536 tons last year, the bureau said.

Gold production in Australia may increase 5.9 percent to 270 tons in the year starting July 1, Wednesday’s report said. The country may export 347 tons in 2013-2014 from 320 tons a year earlier, it said.

The Bureau of Resources and Energy Economics is an economic research unit within the Australian Government Department of Resources, Energy and Tourism