Washington (Platts)--30Nov2012/1221 pm EST/1721 GMT

Though gold futures have yet to recover from their $26/oz drop earlier this week, prices will continue to trend higher next year, partly from demand by exchange-traded funds, analysts with Commerzbank said Friday.

COMEX gold for February delivery, the active month, plummeted $26/oz Wednesday after a large sell order was placed at the open of New York trade. The sell order, consisting of 7,800 contracts, amounted to 24 mt of gold.

Though February gold regained $10 of the loss on Thursday, prices tumbled Friday morning back to key support levels in the lower $1,700s.

"The reason why the price is not climbing more sharply is that there is currently greater demand for cyclical metals," Commerzbank analysts said in a report, referring to base metals and precious metals with industrial applications, like palladium.

But physical inflows into gold exchange traded funds in recent days have been substantial, Commerzbank analysts said. At the end of Thursday, net inflows into major gold ETFs have totaled 13 mt, 4.8 mt of which went into SPDR Gold Shares, the world's largest gold ETF.

"ETF investors, who are generally regarded as taking a longer-term view, are proof that gold remains in high demand as a store of value and a safe haven despite all the price fluctuations," Commerzbank analysts said in the report. "We are confident that the gold price will continue to climb in 2013."

In a separate report released Thursday, Commerzbank analysts also pointed loose monetary policies being pursued by major central banks and geopolitical risks as additional drivers of gold prices.

"We are confident that the gold price will achieve, and indeed exceed at least temporarily, the $2,000/oz mark next year," they said.

--Nick Jonson, nick_jonson@platts.com

--Richard Rubin, richard_rubin@platts.com

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