Gold may climb to a record $2 500 (R19 244) an ounce this year on demand from central banks and investors, according to Schroder Investment Management, which said a longer-term bull run may push the price to twice that figure.
The precious metal might trade between $1 500 and $2 500 this year, ending 2012 at about $2 250, Christopher Wyke, a London-based product manager for emerging market debt, commodity and currency funds, said at a briefing in Singapore.
The bull run might last a further five to eight years, with the price coming near to $5 000, Wyke said on Friday, echoing a call that he made in 2008.
Spot gold, which peaked at $1 921.15 on September 6, gained for an 11th year in 2011, buoyed by central bank purchases and increased haven demand driven by Europe’s sovereign debt crisis.
Holdings in exchange-traded products backed by bullion are near an all-time high, according to data.
“Over the next five to eight years, it’s going to go considerably higher,” Wyke said. “We wouldn’t be surprised to see the price close to $5 000.”
Schroder Investment manages about $10 billion in three commodities-related funds.
Gold traded at $1 777.73 at 4.06pm in Singapore, up 14 percent this year. Gold was fixed at $1 777.50 in the afternoon in London on Friday. Holdings in exchange-traded products were at 2 391.866 tons on Thursday, 1.11 tons less than the December 13 record, according to data. Central banks bought the most gold last year since 1964, according to the World Gold Council.
“Gold is used primarily as insurance,” Wyke said. “There are many risks in the world today. There are risks of Chinese growth slowing, the euro zone looks as if it’s into a double-dip recession. There are risks of further problems in the euro zone, and… in the Middle East. – Bloomberg