Bullion Association Forecasts Gold Average at $1,219

Gold will average $1,219 an ounce this year and gain as much as 10 percent from now, after posting its biggest annual decline in three decades, a London Bullion Market Association survey of traders and analysts showed.

The metal will reach $1,379 and trade above $1,067 through December, the mean response of 28 participants shows. Prices slumped 28 percent last year, the most since 1981, and averaged $1,411, the least in three years. Silver will rise as much as 19 percent to $23.94 an ounce by December, platinum 13 percent to $1,650 an ounce and palladium 16 percent to $863.21 an ounce, the LBMA said today in an e-mail.

Bullion declined for the first time since 2000 and more than $73 billion was erased from the value of gold-backed funds last year as some investors lost faith in the metal as a store of value. The Federal Reserve said Dec. 18 it will trim monthly bond purchases to $75 billion from $85 billion, easing concern about faster inflation. As prices fell in December toward a 34-month low set in June, demand for jewelry, coins and bars increased.

via Bloomberg

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