Gold to peak at $1,900/oz in next six months: GFMS

Gold could hit USD 1,900 an ounce in the next six months, driven by buyers seeking an investment safe from global economic problems, but a further rise to USD 2,000 looks unlikely, metals consultancy GFMS said on Thursday.

"Gold will be muddling through to peak at USD 1,900 (an ounce) as US data points have been ambiguous, the action on the fiscal and monetary front is also ambiguous," said Paul Walker, global head of precious metals at GFMS, which was acquired by Thomson Reuters recently.

Gold extended record highs above USD 1,825 an ounce on Thursday after poorly received US jobs data hurt assets seen as higher risk, such as stocks, while boosting interest in nominal safe havens such as gold.

"In the timeframe, we really need exceptionally dramatic news to push gold above USD 2,000 and this is not our base case." said Walker. "This is highly unlikely."

He said there was a high probability of India's gold imports crossing 1,000 tonnes this year -- up four percent on 2010 -- as expectations were for prices to gain further.

The World Gold Council in a report on Thursday said Indian gold jewellery buying was up 17% in the second quarter and that signs of strength in the market remained.

"People are getting accustomed to this kind of a benchmark (price) even though it is at incredibly elevated levels. Everybody who is involved in the value chain in the Indian gold market thinks prices will go up," said Walker, ahead of a conference in Kerala.

Silver prices could extend gains to USD 50 an ounce in the next months from around USD 40.6 an ounce now, he added.

"It will follow gold up ... It will move towards USD 50, but it is going to be a hell of a lot more volatile," said Walker.