Washington (Platts)--23Jan2013/308 pm EST/2008 GMT

Investor appetite for gold is likely to remain strong this year given the ongoing debt worries in Europe and the US and the possibility of additional stimulus measures, analysts with UK commodities brokerage Sucden said Wednesday.

"While the improved macroeconomic picture reduces the likelihood of additional gold-positive monetary stimuli -- although debt worries in the EU and US have merely been postponed rather than resolved -- we feel there is still room for QE/stimulus should the need arise," Sucden analysts said in a report, referring to recent quantitative easing actions by central banks.

Along with concerns about debt and economic growth, inflation concerns in India and deflation concerns in Japan are likely to provide further support for gold prices, Sucden analysts said.

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"China and India are likely to enjoy strong growth this year as economic conditions in both countries improve, the caveat being the Reserve Bank of India's continued efforts to reduce its trade imbalance, which it attributes largely to gold imports," the analysts said.

Turning to supply, the Sucden analysts said current volumes of gold from recycled jewelry were likely to continue, but noted that primary supply outside of China remained minimal.

While China continues to report strong economic growth, "none of its supplies has entered into the global supply stream," the analysts said.

Market analysts polled by the London Bullion Market Association recently forecasted an average gold price for $1,766/oz, with 77% of those polled expecting a break above $2,000/oz at some point this year.

"We echo the bullish general market consensus, but while we feel that gold will record a broad range of $1,550-1,985, we see it struggling to achieve the $1,844 average forecast by eight leading investment banks," the Sucden analysts said. "Instead, we see gold setting an average closer to $1,750."

--Nick Jonson, nick_jonson@platts.com
--Edited by Richard Rubin, richard_rubin@platts.com

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