S&P Raises Gold Price Outlook, But With A Catch

Analysts at Standard & Poor's raised their near-term outlook on gold prices by $100 an ounce this past Thursday. S&P expects gold to trade at $1,200 per ounce for the remainder of this year. Price estimations for 2012 were raised from $1,000 to $1,100 per ounce, with 2013 and beyond now hitting $900 per ounce. Previous price targets were $900 for 2012, $700 for 2014, and $600 for 2015. What's interesting is that S&P's estimations for gold prices are about $300 lower that today's current prices. S&P Analysts Andrey Nikolaev and Mark Puccia expressed concerns with the fact that "about half of the demand for gold comes from financial investors.” The pair cited that “The key risk remains a sharp decrease in investor demand as the uncertainty in the global economy declines.” While S&P's forecast for higher gold prices seems spot-on, the price targets themselves seem a little off. If anything, there's been an increase in uncertainty as of late. Lower consumer confidence, stubbornly high unemployment, and not to mention the Euro-zones woes. The central banks of China, India and Mexico have been buying gold due to the excessive supply of dollars created since the credit crisis began. The future role of the greenback as the world's reserve currency is also in question. For investors, that means gold prices will stay firm for quite some time. Adding gold on any days of weakness seems like a prudent choice. There are plenty of ways to gain exposure including the iShares Gold Trust

, PowerShares DB Gold

, and the ETFS Physical Asian Gold Shares

. Disclosure: Author is Long IAU