Driven by a fear of inflation, new record high prices for gold are expected in the second half of 2009 – those are the conclusions of GFMS Precious Metal Research & Consultancy, expressed at a function in China, reports Mining Weekly.

GFMS chairperson, Phillip Klapwijk, spoke in Beijing at the launch the annual Gold Survey on Wednesday alongside experts from Shanghai Futures Exchange and Shanghai Gold Exchange.

Klapwijk explained that as far as supply in 2009 goes, it is expected to increase. Financial pressures result in larger quantities of used jewelry going back into the market. A mild increase of mining activities is also expected to add to supply. Demand for new jewelry is expected to decline dramatically. However, investors are forecast to purchase the surplus of gold. “The price may have pulled back a fair bit from the February highs but that was largely just the market’s reaction to jewelry demand crumbling and scrap booming. We believe that it’s far from game over for investors. The gold price in the coming months could easily re-attain the $1 000 mark and is likely to push up towards a fresh record high before the end of the year,” said Klapwijk, as reported in Mining Weekly.