LONDON (MarketWatch) -- Citigroup Inc. C -0.10% Monday raised its gold and silver forecasts for 2012 and 2013, citing expectations of increased resilience in both metals amid a "high probability" that the macroeconomic and financial factors that have propelled prices over the past three years will continue for the next 12-18 months.
The bank now sees gold averaging at $1,950 a troy ounce in 2012, compared with $1,650/oz previously forecast, and sees a 2013 gold price of $1,745/oz, up from $1,500/oz.
Citi expects an average silver price of $32.90/oz in 2012, compared with its earlier forecast of $26/oz, and a 2013 price of $27/oz, up from $22.40/oz.
"Increased global risk, U.S. dollar weakness, growing inflationary fears, the U.S. debt downgrade and continuing sovereign debt risks in Europe have increased investor appetite for gold," Citi's Jon H Bergtheil said in a research note.
"This has been supported by central banks reversing activities from being sellers for most of the past 15 years to net buyers more recently and is supported by the Fed's stated desire to keep interest rates at super-low levels in the medium term," he said.
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