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Gold Price Forecasts Raised by Citigroup

A MAJOR financial conglomerate has raised its Gold Price forecast for the next two years.

Analysts at Citigroup say they now believe Gold Prices will average $1950 per ounce next year – up from their previous forecast of $1650.

"Increased global risk, US Dollar weakness, growing inflationary fears, the US debt downgrade and continuing sovereign debt risks in Europe have increased investor appetite for gold," says Citigroup analyst Jon H Bergtheil.

Gold demand adds Bergtheil, "has been supported by central banks reversing activities from being sellers for most of the past 15 years to net buyers more recently and is supported by the Fed's stated desire to keep interest rates at super-low levels in the medium term." 

Citigroup also raised its 2013 Gold Price from $1500 per ounce to $1745. Silver Prices meantime are forecast to average $32.90 per ounce in 2012 and $27.00 in 2013 – up from $26.00 and $22.40 respectively.

Earlier this month, Credit Suisse also raised its 2012 Gold Price forecast, raising its predicted average from $1540 to $1850.

"Given that many of the factors that have underpinned the rapid increase -- most importantly, fears of a global meltdown -- remain in place, we expect gold prices to continue to recover over the balance of 2011," explained Tom Kendall, precious metals research analyst.

BNP Paribas meantime has cut its Gold Price forecast for 2012 – from $2080 per ounce to $1950.

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