GFMS Call For $1,300 Gold Within Six Months

Largely because of investment demand, GFMS called for gold to reach $1,300 in the second half of this year.

In GFMS's view, the growth expected, especially in value terms, of investment demand will probably be sufficient to drive prices above the USD 1,300 mark during the second half," the London-based consultancy firm said in a statement.

GFMS expects investment demand to be volatile in the second half of 2010, but remain on a positive trend overall due to ongoing concerns on the long-run value of major currencies, it said.

Fabrication (mainly jewelry) demand is expected to rise too, although not very fast because of higher prices; 2010's demand is not expected to exceed 2008's. The main risk to gold is a substantial tightening in monetary policy.