Second Half of New Year may See Gold Prices Reach $2,000

Investors are keen to know whether the past decade’s gold boom is set to reach a new high. Surveys have been indicating that it is possible that gold will trade along the present levels during the first six months of the year. This may be followed by a rebound in the last six months in 2012 if economic conditions get better.

With investors being satisfied with risks, in the middle of the week, gold futures saw a high which was a first in the past five weeks. This happened after the price of gold increased by 10% in 2011, especially between August and September.

Demand for Gold Strong

Recently, gold futures went up $3.40 per ounce. This took its price to $1,659 per ounce. It has been the highest close that the precious metal has seen after December 13. Since then, gold prices have wavered a little. However, the demand for gold continues to remain strong, with the Euro crisis showing signs of easing.

Industry analysts believe that gold will reach $2,000 per ounce in 2012. But, the current predictions are not as strong as those in 2011′s second half. In the short-term, gold prices may struggle, especially if the demand falls after the Lunar New Year in Asia. Reuters GFMS feels that gold is most likely at the end of its successful ten year run.

Precious Metal Price may Retreat

With the macro-economic structure likely to get better by 2013, the demand for gold as an investment option will fall. This will then be followed by a retreat in the price of the precious metal. According to Reuters GFMS, gold will see a strong rise in prices. However, the prices will mostly be weak in the fist six months of the year.

Though this prediction has been made, investors are concerned. Previously, forecasts were made about gold prices increasing by the end of 2011. However, these were proved wrong when prices fell after the euro crisis became serious. Analysts and consultants defend their view with the point that interest rates are low, inflation expectations are high and monetary policies are easing.