Market Nuggets: BNP Paribas Retains Average Gold Forecasts Of $1,500 In 2011, $1,600 In 2012

BNP Paribas continues with their average gold forecasts of $1,500 for 2011 and $1,600 in 2012 mainly due to demand predictions from emerging markets and inflationary pressures.

29 March 2011, 01:35 p.m.
By Kitco News
http://www.kitco.com/

(Kitco News) -- BNP Paribas is retaining its average gold-price forecasts of $1,500 for 2011 and $1,600 for 2012. Demand from emerging markets, particularly Asia, remained strong in the first quarter, but interest from developed economies was more subdued, BNP says. Safe-haven demand rose with the political upheaval in the Middle East-North Africa and due to events in Japan, says the report from Anne-Laure Tremblay. However, financial and monetary concerns have taken a more negative turn, with rising inflation concerns and economic growth meaning monetary tightening “will come sooner rather than later,” BNP says. Still, the bank says, “we expect the different developments to roughly balance each other,” resulting in no changes to BNP’s annual forecasts. One of the main factors likely to influence gold will be safe-haven demand due to European debt issues, as well as events in the Middle East and Japan, BNP says. Other key factors will be monetary tightening and inflationary pressures.

By Allen Sykora of Kitco News; asykora@kitco.com

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