Gold to reclaim record highs in 2012

SINGAPORE, Oct 16 (Economic Times): Gold prices are expected to scale record highs next year as the asset's bullish fundamentals trump the current macroeconomic uncertainty that led to a recent selloff in the precious metal, says a commodities fund manager. The slump in gold last month has resulted in a "wash-out" of speculators in favour of more stable long-term buyers like exchange-traded funds and central banks, said Diego Parilla, chief investment officer of new Singapore-based commodities hedge fund NARECO Advisors. "There has been a transfer of length between short-term speculative buyers and long-term strategic holders, and we expect this trend to continue for years," Parillo said in an interview. "Central banks are looking to diversify from the once-upon-a-time risk-free government bonds, and gold is viewed as an attractive alternative. Not so much due to gold's own merits, but more by lack of a better choice."