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By Stuart Burns

GFMS is expecting net investment demand to be the main price driver during 2013. Are they right?

Well, a survey of industry forecasts by the London Bullion Market Association is predicting a price range for 2013 of between $1,529 per ounce to $1,913 per ounce, with the average at $1,753/oz. Friday's spot price was $1,671.50/oz, but the forecast from 23 of the largest bullion-dealing banks and trading houses stops short of predicting a new high for the metal this year.

Much of the bullishness is predicated on continued quantitative easing, low interest rates and fears around the U.S. fiscal negotiations -- we have to say, though, that's no different from what we have had for the last few months and the gold price has dropped 6.9% from its recent peak last October.

Collectively, though, the forecasting record of the analysts and traders surveyed by the LBMA is strong, the Financial Times says. They have correctly predicted the direction of average gold prices in each of the past 10 years -- when the metal has risen every year -- with an average error of about 5%. We'll see (who are we to buck such informed observers?). However, only a prolonged and strong move higher will dissuade us from our view that gold has already peaked and its 12-year bull run is probably at an end.

Just for the record, the analysts also forecast gains for the other precious metals. They said silver would average $33.21/oz this year, up 6.6% from last year, but that palladium would enjoy the strongest rally -- rising 15.5% to average $744/oz.

Source: The Old Guard Analysts And Their Gold Price Forecasts - Part 2