The annual gold forecast of HSBC has been raised and is expected to average as much as 2,025 USD a troy ounce in 2012. The precious metal benefits from fears of sovereign debt levels geopolitical risks and a lack of alternative safe investments.
The bank, which had revised its forecasts as recently as Aug. 8, said it is increasing its 2012 forecast 25% from an earlier estimate of $1,625/oz, and its 2011 forecast to $1,630/oz, up from $1,590/oz. It is also increasing its 2013 forecast to $1,850/oz from $1,550/oz, and its long-term expectations to $1,500/oz, from $1,375/oz.
“Despite gold’s high volatility and wide price swings, we remain positive on bullion. The steep rise to $2,025/oz for 2012 is based primarily on heightened investor anxieties and the paucity of alternative safe-haven assets,” HSBC analyst James Steel said.
The bank said that while increases in mine output and scrap supplies, in response to higher metal prices, may curb the rally, they “seem unlikely to reverse it.”
