Gold may touch $1,850 by end of 2011: Barclays Cap analyst

MUMBAI: Gold prices are likely to touch USD 1,850 an ounce (28.35 grams) by the end of 2011, mostly as a hedge against economic uncertainty, a Barclays Capital analyst today said.

Gold was today trading at USD 1,346.70 an ounce in the international markets.

"The increasing amount of asset allocation and people waiting for a long time for the gold price to drop coupled with uncertainty will take the price to USD 1,850 an ounce level by the end of next year," Barclays Capital Director Jonathan Spall told reporters here.

When asked if India will buy more gold, he said, "it is unlikely as the country has already bought 200 tonne from the International Monetary Fund for USD 6.7 billion in November 2009."

However, some Central Asian countries and sovereign wealth funds are actively looking to buy gold, he said without naming the countries or central banks.

Barclays Capital Managing Director Paul Horsnell said in base metals copper and tin will benefit due to severe supply constraints and the positive demand trends.

On energy, he said, "we are positive on oil prices, which is likely to average at USD 85 per barrel next year."