Forecast on price on gold for 2011-2012

Azerbaijan, Baku, Feb. 8 / Trend A. Badalova /

Gold is starting to lose its appeal on the backdrop of the global economy's gradual recovery, as evidenced by the falling demand.

A significant rise in the price of gold was linked with the global financial crisis, when the precious metal was seen as an alternative to currency volatility. In general, over the past year the price of gold rose by 30 percent, which greatly contributed to the debt crisis outbreak in Europe in early 2010.

Western analysts, however, continue to predict the increase in the price on gold in the short term.

Analysts at Britain's Capital Economics believe the fall in the price of gold observed in early 2011 will not last long. They expect the price to rise to $1,600 per troy ounce by late 2011. In the first quarter, the price of gold will be $1,400, and then it will increase to $1,450 in the second quarter and up to $1,500 per troy ounce in the third quarter. In 2012, analysts predict a rise in the price of gold to 2,000 per troy ounce.

The U.S. bank Goldman Sachs believes the price of gold will reach its peak in 2012, which is linked with the bank's expectations relative to the growth in the U.S. interest rates in 2012. The analysts predict the price of gold will reach a level of $1,690 per troy ounce. In 2012, according to analysts' expectations, the price of this precious metal will be $1,750 per troy ounce.

The largest U.S. investment bank Morgan Stanley raised forecasts for the price of gold by 6.5 percent to $1,400 per troy ounce in 2011 and 6.4 percent to $1,330 per troy ounce in 2012.

Analysts at the Swiss bank UBS expect the average price of gold to be at $1,550 per troy ounce in 2011 and 2012.

British investment bank Barclays Capital expected the price of gold to amount to an average of $1,500 per troy ounce in 2011, while the maximum price for the precious metal could reach $1,620 and the minimum - $1,300 per troy ounce. Investor demand for gold this year will be supported by factors such as low interest rates, the weak position of currencies, and inflation fears, the bank reported.

Forecasts on the price on gold for 2011-2012 (in $ / troy ounce)