Is gold on a winning streak?

The growing political turmoil across the Middle East, in the presence of European debt woes is keeping the streak alive for gold.
The glittering metal, after gaining around one-third in 2010, hit a record high of $1447 per ounce last week, strengthening by around 3 percent since the start of this year.
As the factors responsible for the gold rally in 2010 are still present, spanning from fragile US economic recovery to the financial crisis in Europe, the uprising of geopolitical tensions would spark gold price further in the ongoing year.
Rising petroleum prices are also adding to golds charm. Oil prices have increased by 8 percent in March alone, igniting fears about high inflation down the line. Moreover, Chinas central bank has also shared the same view in its recent report, suggesting gold to get favours from inflation risk. At the same time, it also warned about the downside price risk.
As US market indicators have been depicting a mixed outlook, the gold market remained less sensitive to the latest developments in the US. The natural catastrophes and nuclear crisis in Japan didn help much either.
Gold prices eased to a month-low of around $1400 on 15 March, the second working day after the calamity in Japan, but prices started rising again. This damage to golds rising trend primarily stemmed from selling aimed to cover margin losses in equities and other commodities.
As the unrest in the Middle East doesn seem to be receding any time soon, and is seen prevailing, even spreading to other countries during the rest of 2011, gold demand would continue to strengthen during the rest of the year. "Gold will strengthen 19 percent to $1,700 an ounce by the end of 2011, Michael Verhofen, Frankfurt-based manager of the Allianz RCM Commodities Fund, said in an interview to an international news agency last week.
However, caution is urged for investors interested in metal buying as findings from recent survey (annual survey of institutional investors) conducted by Barclay Capitals don chime well with the fundamentals. With gold already trading at high levels, institutional investors surveyed by Barclays show that the big boys do not expect gold to remain a star performer in 2011.
"Investors chose crude oil as the commodity which will perform best whilst natural gas was chosen as the worst. The popularity of precious metals appears to be waning. Whilst 2010 was a stellar year for gold, it came nearly bottom of the list in its potential to be a star performer in 2011," Barclays Capital said.