Gold News

Gold and Silver Prices to Rise: Merrill Lynch

ANALYSTS at Merrill Lynch forecast further gains in gold and Silver Prices over the next two years.

Michael Widmer, Francisco Blanch and Alex Tonks write in a new report this week that they expect the Gold Price to average $1200 an ounce in 2010, followed by $1350 next year and $1400 in 2012.

That's a hike from Merrill Lynch's previous forecasts of 9%, 14% and 26% in each respective year.

"We also believe the Silver Price has further upside," the Merrill analysts go on, seeing an average price for silver of $21 an ounce in 2012.

"Our positive view on gold and Silver Prices is heavily influenced by the current macroeconomic environment," they write, pointing to low central-bank interest rates, soaring government debts, a drop in potential economic growth, plus strong gold and Silver Investment demand from Chinese households.

Merrill Lynch's view was echoed here in London on Tuesday by RBC Capital Markets, which opened its African Gold Conference by forecasting an average Gold Price of $1200 per ounce for this year.

"In the second half of 2010, we could see gold reach $1300, before pausing to consolidate in 2011," says Patrick Meier, head of global investment banking at RBC Europe.

"Growing inflation expectations will see the potential for higher Gold Prices into 2012."

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