A 17% rally in the price of gold during the first quarter of the year to around $1 270/oz happened too rapidly according to market analysts at Thomson Reuters GFMS, as poor demand from Asia would probably see the gold price fall below $1 200/oz over the next few months.
However, this price level was expected to encourage demand recovery in the Far East, which could ensure that prices stayed well above cyclical lows. GFMS expected gold prices are set to resume their bull run and traded around $1 300/oz towards end of the year, as renewed interest from the West, and slowly tapering mine production implied future support at this level.
