Morgan Stanley average gold price forecast for 2012 : Gold prices were flat as some investors shifted focus from the U.S. debt-ceiling stalemate to cash in recent gains while a weaker dollar lured others to increase their gold holdings. The most actively traded contract, for August delivery, was recently up 40 cents at $1,612.60 a troy ounce on the Comex division of the New York Mercantile Exchange.
Thinly traded July-delivery gold had not changed hands at 9:50 a.m. EDT.
Gold futures soared to a record $1,624.30 Monday july 25 2011 after talks between the White House and Republican Party leadership broke down over the weekend. Gold is widely considered a hedge against political and financial risk as it keeps its value better than most other assets during periods of high uncertainty.
Investors are also flocking to buy physical gold, with the metal held in the 25 largest exchange-traded funds rising by 2.9 metric tons to a record 2,175.4 metric tons at the end of Monday.
A weaker dollar also kept gold prices supported. Demand for dollar-denominated gold futures tends to rise when the dollar weakens because the contracts appear cheaper to investors holding foreign currencies.
analysts at Morgan Stanley raised their average gold price forecast for 2012 by 22% to $1,624 a troy ounce as investor demand will likely remain strong amid ongoing government debt concerns. The bank also raised its silver forecast to $36.90 a troy ounce, up 30% from previous estimates
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