The price of gold could reach US$2000 this year, according to Thomson Reuters GFMS.
Launching the consultancy’s Gold Survey 2011- Update 2, global head of metals analytics Philip Klapwijk stressed the price may however struggle in the short term – and thus the cosnultancy’s forecast for the first half of 2012 is an average price of just US$1640.
“We are conscious that the Eurozone crisis is far from over and its impact on liquidity, the value of the US dollar and attitudes to risk could all become very apparent, particularly once buying linked to the Chinese new year is behind us,” he said.
The consultancy believes that gold prices then shrug off such lethargy and power ahead to fresh all time highs in the second half of 2012 due to exceptionally low interest rates, enhanced inflation expectations basis monetary policy easing and a general mistrust of fiat currencies.
“We could even see prices just over the $2000 mark later this year or in early 2013,” said Klapwijk.
“We’ve seen a great deal of attention on the Eurozone debt crisis, which has led some to seek out the dollar and US Treasuries as a least bad option.
“However, the re-emergence of US concerns, in particular any apparent need to adopt QE3, could really fire up the gold market. After all, don’t forget that gold’s price spike last August/September followed on from the US debt ceiling impasse and downgrade.”
Finally, the consultancy acknowledged that the gold market is nearing the closing stages of its decade long bull run and that, once the macroeconomic backdrop changes and investment in gold fades (probably some time in 2013), a secular retreat in the price will unfurl.