Gold could touch $1,100 an ounce, beating its present record high of$1,034 scaled in March last year, according to a survey by Gold Field MineralServices (GFMS), a London-based independent precious metal researchconsultancy.

The 42th edition of the annual Gold Survey also forecasts gold prices to enterthe $1,000-level in the coming months on surging demand for the precious metalas a store of value. Spot gold is currently just above $875 an ounce.

The report said that the fiscal and monetary measures taken by the globaleconomies, mainly the US, may enhance gold’s potential through theirinflationary pressures. Apart from that, the global central banks may resumeinterest rate cuts, which may make the yellow metal an attractive option forinvestment.

During 2008, jewellery demand resumed in the late summer as prices sank throughthe $800-mark. Hadn’t buying resumed, the price could have fallen further,Klapwijk added.

Total fabrication fell by 7 per cent to 2,850 tonnes in the last year, itslowest level since 1988. The bulk of the loss was attributed to the slump inthe first half, followed by a slight recovery in the third quarter and nearstability in the fourth quarter in the jewellery sector.

Global mine production fell by a moderate 3 per cent in 2008 to the lowestlevel since 1996. The largest drop last year was seen in Indonesia, while muchof the remaining losses were concentrated in South Africa and Australia.

In contrast, gold production in the Commonwealth of Independent States (CIS),primarily in Russia, and Latin America (largely concentrated in Peru andMexico) saw gains. China maintained its position as the leading gold producingcountry, while the US moved into second place.

The decline was the result of lower Central Bank Gold Agreement (CBGA)disposals and modest net purchases outside the group. Driven by low lease ratesand, above all, growing concern over counterparty risk, central banks continuedto exit from the lending market.