Gold is benefiting from growing investor anxiety about ineffective government policies

HSBC was the latest investment bank to raise its gold price forecasts and is now calling for gold to reach $2,025 per ounce in 2012.

In the firm’s report, HSBC analyst James Steel wrote that “Despite gold’s high volatility and wide price swings, we remain positive on bullion. The steep rise to $2,025/oz for 2012 is based primarily on heightened investor anxieties and the paucity of alternative safe-haven assets.”

HSBC went on to say that ““We believe gold’s 10-year bull market remains firmly intact, despite high volatility, with prices up 29 percent already this year…The euro zone debt crisis, currency wars, and deep uncertainty among investors are among the factors driving prices higher…Gold is benefiting from growing investor anxiety about ineffective government policies, unsustainable government debt levels, and the potential for a further global slowdown.”

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