Gold can be a star performer for investors in 2012, just as falling imports of the metal into India undermine the trade in Dubai, said a leading precious metals expert.

Jeffrey Rhodes, the global head of Precious Metals and CEO, INTL Commodities, Dubai Multi Commodities Centre (DMCC), predicted that gold prices will threaten to reach $2,000 per ounce this year, but ultimately fall just short of the mark.

Rhodes, who has been involved in the international precious metals business since 1978, took part in a panel debate on Friday on the future of the US Dollar, BRIC (Brazil, Russia, India, China), and commodities, at the 51st ACI Financial Markets World Congress in Dubai.

Sultan Bin Nasser Al Suweidi, UAE Central Bank Governor, delivered the welcome address at the two-day congress which is being hosted by the UAE Financial Markets Association, which was established in December 2011, and is an affiliation of the Association Cambiste Internationale (ACI), the global umbrella body of the national financial markets associations around the world

Speaking at the panel debate, Rhodes said the present weakness across the precious metals sector, and a strong track record in performances over the last ten years, were the key factors combining to present good buying opportunities.

Analysing the potential for investment in precious metals this year, Rhodes said that while gold has gained by 5.43 per cent from the end of 2011 to its current price of around $1650, this is well off the high of $1790 posted at the end of February.

“I remain cautiously bullish for 2012 as a whole and see the current weakness across the precious metals sector as a buying opportunity,” he said. “In a world devoid of yield, money managers need to invest in asset classes that will give capital gains, and moreover they need to point to track record when explaining their investment strategies to their investors.

“Gold is the star perfomer in global markets, gaining 480 per cent over the last ten years, posting an increase in the annual price in each of those years with an average annual return of 20 per cent per annum.

“While some would argue that gold is simply a counter currency investment to the USD, the fact is that gold has performed well in a wide range of currencies. During the period 2001 to 2011 gold rose by 273 per cent in Euros, 280 per cent in yen, 353 per cent in Yuan, and 436 per cent in Indian rupees.

“Silver has been even more impressive with the average price in 2011 almost 600 per cent above 2001 with an annual average return of 23 per cent per annum over those ten years. Platinum and palladium rose by an annual average of 14 per cent p.a. and 10 per cent p.a. respectively over the same period.”

Added Rhodes: “We expect a high for gold in 2012 of $1,975. I think that gold can be such a tease that it will get everyone excited about a price north of $2,000 only to let us down. Our suggested low is $1,465 with an average price for 2012 of $1,727.”

He said the projected high for silver this year is $50.25, with a low of $22.25 and an average price of $36.25. Platinum is expected to reach a high of $1,940 with a low of $1,305 and an average price of $1,735 for the year. Palladium is projected to reach a high of $920, a low of $565 and an average price of $765.

According to him, the prospects for the gold trade in Dubai, as a proxy for the Middle East, are very much tied to the outlook for physical gold demand in India.

Following the recent actions by the Indian Government to raise import duties, imports of gold into India are this year expected to be sharply down on 2011, which will impact Dubai's gold trade, he added.-TradeArabia News Service