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Friday, December 30, 2011

What will happen to gold prices in 2012

What will happen to gold prices in 2012 ; Gold has had an incredible past decade, rising every year. But the price has come off the boil in recent months, with it now at $1,572 an ounce compared to the record high of $1,920 in early September.

We reflect on a rollercoaster year for the commodity, look ahead to what will happen to gold prices in 2012 and reveal the best ways to invest in the new year.Most market watchers expect it to continue rising. Paterson said he had a three-year price target of $6,969 as a minimum – an extremely bullish figure.

He said: ‘At a minimum gold investors should be looking for a repeat of gold’s performance for each of the past 10 years. Namely a 15-20 per cent rise which would mean a gold price of around $1,858 by December 2012.’ Read gold, silver price target 2012-2013

Tom Biggar, head of investments at TQ Invest, said political uncertainty and tensions in Europe, meant gold would remain the safe haven of choice for many investors.

Evy Hambro, portfolio manager BlackRock Gold & General fund and BlackRock World Mining Trust, said central banks in emerging economies were also snapping up gold in preference to the US dollar.

He said: ‘We are seeing an increased demand from central banks, which in the last couple of years have reversed their trend of selling bullion.’

‘Demand has been driven by emerging markets, in particular Russia, Mexico, Thailand and South Korea, who are buying physical gold as an alternative currency and as they look to diversify away from the US dollar.

‘In addition to this, consumers are buying gold to protect their purchasing power in an environment of high inflation and low interest rates. This is not only being seen in the UK, but also in areas such as China, where investment demand was up 90 per cent in 2011 to 138 tonnes.

‘Add to this the limited supply of gold; the price has increased 400 per cent since 2001, while the amount of gold produced by the mining sector has remained somewhat muted by comparison and we fully anticipate the positive outlook for the price of bullion to continue, coupled with the re-rating of gold equities as we enter 2012.

Jeff Hochman, director of technical analysis at Fidelity expected gold to stay priced at around $1,400 to $1,900 per ounce.

Over the longer term analysts at Standard Chartered expect the price to hit $2,100 an ounce within three years and almost $5,000 by 2020. For the latest updates PRESS CTR + D or visit Stock Market news Today

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