The value of gold might reach $1,600 per troy ounce this year as a result of interest rates staying low and Europe's continued struggle with its debt-riddled banks, according to an English researcher's report.
Demand for gold might grow so that the precious commodity draws "major expansion in investment before the gold bubble inevitably bursts," Bloomberg reports GFMS of London stated. Investment in gold will be 15 percent higher during 2011's first half than it was during 2010's same period.
"We are looking at more of the price strength to occur later into the year," research head Neil Meader told Bloomberg.
GFMS stated demand for gold is rising. In 2010, when the value of gold surged 30 percent, gold jewelry demand climbed 16 percent. Gold bar hoarding more than doubled.
"For prices to stay firm, the market is clearly dependent on investment," according to GFMS. "Investors and some official sector institutions will be very concerned at the growing risks of currency debasement, be that via inflation or depreciation, and of sovereign debt default."
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