Gold prices are set to mark an eleventh year of gains in 2011 as investors seek refuge from an uncertain global economic outlook, with analysts revising up expectations sharply in a Reuters survey released on Wednesday.

A poll of 55 analysts and traders showed expectations for gold prices in 2011 have risen by nearly 7% to a median USD 1,228 an ounce, from a forecast of USD 1,150 in a similar survey conducted in January.

For 2010, expectations for gold have risen by 4% to a median USD 1,197.00 an ounce from USD 1,150.50 in January, when market watchers were forecasting prices to rise this year before plateauing in 2011.

Gold prices hit a record USD 1,264.90 an ounce in late June, as concern over the ability of several European countries to finance their debt burdens destabilised the euro and sharpened volatility across financial markets, fuelling an investor flight into the perceived safe-haven asset.

"Resurfacing concerns over another wave of recessionary conditions should keep investment demand for gold firm, as investors look to hedge against financial market volatility and vulnerability," said CPM Group analyst Rohit Savant.

Several governments including Greece, Spain and Portugal have imposed austerity measures to cut their deficits, which has injected a degree of confidence into the equity markets, where investors expect earnings to paint a picture of improving business investment and economic growth.

While this optimism has lessened the need of investors to protect their portfolios against more volatility with gold, fear of a slowing in overall growth has persisted.

Source: http://www.moneycontrol.com/news/commodities/gold-rally-to-extend-into-2011-macro-fear-persists_471580.html