LONDON: Gold prices will rise 5.1 percent this year, stretching the precious metal's bull run into a thirteenth year, a poll of London Bullion Market Association members predicted on Friday.
The forecast average gain would be the smallest in more than a decade, however, reflecting a more cautious tone towards gold as speculation grew that more stable economic conditions will cut the need for some governments' ultra-loose monetary policy.
Monetary easing measures, particularly successive rounds of quantitative easing money printing to buy bonds -- in the United States, have boosted the appeal of bullion by keeping a lid on long-term interest rates and fuelling inflation fears.
Current rock-bottom interest rates, gold buying by central banks, and concerns over the stability of paper currencies are all helping predictions for further gains, however.
"In 2013, forecast contributors predict rises for all precious metals for the fourth year in a row. Their average gold forecast is $1,753," the LBMA said in a release on Friday.
In its 2013 outlook, HSBC said: "After an initial strong boost from the announcement of QE3 and a rally in the euro, gold prices went on to the defensive for the latter part of Q4."
"We believe that gold prices will recover this year and retain a pronounced bullish posture. Fed funds are likely to remain at current low levels until sometime in 2015."
"Other major central banks have also adopted conventional or unconventional easing of monetary policy," it added. "The 'weight of money' argument states that when liquidity rises, the value of hard assets tends to rise. This is widely accepted as gold-bullish."
The average of forecasts from 23 LBMA members showed an expectation for silver prices to post a 6.6 percent gain on last year to an average $33.21 an ounce, and for platinum prices to rise 8.4 percent to average $1,682.
Palladium was the favourite among the major precious metals, with respondents returning an average forecast of $744.03 an ounce, 15.5 percent above its 2012 average and 7.8 percent above its current $690 an ounce.
The palladium market is expected to tighten next year as carmakers, the main users of the autocatalyst metal, raise production and as sales from Russian stocks, which had kept the market in surplus for a number of years, dissipate.
Spot gold was at $1,667.50 an ounce at 1250 GMT, while spot silver was at $30.60 an ounce and spot platinum at $1,611.50 an ounce.
LBMA data shows Ross Norman of bullion broker Sharps Pixley has been the most accurate London gold price forecaster throughout the metal's 12-year bull run.
In 2013 he forecast gold will average $1,736 an ounce.
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