Gold prices: Short- and medium-term forecasts

Azerbaijan, Baku, Dec. 14 / Trend A.Badalova /

Futures gold prices slightly increased after a fall for four consecutive days on the backdrop of the decrease in the U.S. dollar. As a result of auctions Dec. 10, quotes on February's futures for gold rose by 5.3 to $ 1,126.20 per troy ounce on the COMEX.

Analysts' forecasts on gold prices differ in the shor-t and medium-term prospects.

Analysts at leading British economic consulting firm Capital Economics believe prices on gold are likely to fall sharply again in 2010. According to the analysts, prices will fall below $ 1,000 per troy ounce.

"Gold is often seen as a currency, not a commodity, and particularly as a competitor to the U.S. dollar. We look forward to next year's restoration of the dollar and as a consequence another drop in gold prices," a Capital Economics report says.

One of the largest world banks JPMorgan expects a sharp increase in commodity prices in the first half of 2010 associated with high levels of global liquidity on the market.

According to JPMorgan, prices on gold will rise to $1,400 per troy ounce in the second half of 2010. As a result of 2010, the bank forecasts gold prices to hit $1,288 per troy ounce. In the medium term prices on gold will fall to $ 1,000 per troy ounce in 2013.

Based on the forecasts of the British HSBC bank, next year the average gold price will amount to $1,150 per troy ounce and in 2011 - $ 975.

One of the largest U.S. investment banks Goldman Sachs predicts average gold prices to hit $1,265 per troy ounce in 2010 and $1,425 in 2011. However, gold prices will begin to fall as soon as the U.S. Federal Reserve System will start to raise discount rates on the backdrop of the restoration of the U.S economic situation, the bank's analysts said.

The German Deutsche Bank forecast that prices on gold will rise on the backdrop of an expected weakening U.S. dollar. In 2010, the bank forecast average gold prices of $1,150 per troy ounce.

Projections on gold prices in the short and medium term ($ / troy ounce)

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