LONDON (Commdity Online): HSBC is maintaining its forecast for an average gold price of $1,850 for 2012 and the anxieties about large and unsustainable government debt, easy monetary policies and mounting geopolitical risks.
“A shift in focus from eurozone sovereign debt to the U.S. and its fiscal problems in an election year may stimulate investor demand for gold,” HSBC added.
According to HSBC, the rising mine output, sluggish jewelry demand and a large scrap supply should curb but not reverse the gold rally.
“A shift in central banks’ attitudes toward bullion, as they have become strong buyers of gold after decades as net sellers, is perhaps the single most important bullish development for the market since the creation of gold ETFs,” HSBC continued.
“We expect this to continue, as official sector demand should tighten supply/demand balances, which has positive ramifications for prices,” HSBC concluded.
