Whilst economies stagnated, stock markets tumbled and global economist’s anxiety continued to rise, those with a keen eye saw a double-digit increase in the price of gold over the course of the year in 2011.
Now with 2012 in full swing, the continuing economic uncertainty surrounding Euro and U.S debt issues, flat-lining Western economies, a potential Chinese market slow down and other significant influences has seen the world’s banks and brokerages predict another bumper year for gold.
Indeed, UBS and Swedish SEB Merchant Bank are predicting an average 2012 price of $2,050 an ounce, with UBS commenting “most of the factors that pushed gold higher in 2011 are not going away…so long as uncertainty abounds, gold has a fighting chance of outpacing many asset classes.”
Market giants Morgan Stanley and Barclays Capital are in broad agreement, both forecasting prices of $2,200 an ounce in the year to come. Morgan Stanley believes “the defensive nature of gold, and silver to a lesser degree, will create significant investment demand as investors look for safe havens in a period of risk aversion” and Barclays Capital saying “growth in investment demand is occurring despite price corrections.”
Of course, it remains to be seen if 2012 will match or even exceed the turbulence of 2011, but the continuing economic uncertainty does look as if it will stimulate another strong year for gold.