Bullish Bullion: Gold to gain 10%, Silver 20%

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"Prices are well supported by rising physical and investment demand."

Gold benefitted from a dip in the economical cycle that pummeled the U.S. currency, driving investors toward the safety of gold. The metal has since explored new heights with investment and safety buying piling up, lending the metal with wings to rise.

Global economies introduced stimulus packages and bailouts in their desperate efforts to resist inflation and rekindle growth. These financial inducements seem to be bearing fruit with economic data releases slowly creeping into positive territory.

Prices are well supported by rising physical and investment demand. Gold prices during February 2010 hit its lowest level since November 2009 as technical selling that emerged following a stronger USD and macroeconomic concerns that threatened Europe and its currency put pressure on the market.

However, gold prices have held up well at supports after falling almost 15% from the all-time high of $1,226.

Emergence of significant physical demand at lows has helped the metal keep most of its gains from the bull run that commenced during the beginning of the 21st century. Investment demand of the metal has also been supporting prices.

Physical demand from the major importers like India and Turkey has been encouraging. According to the Bombay Bullion Association, imports of India during March 2010 have jumped toward 23–28 tons—compared to 4.8 tons during the same time last year. Higher imports of gold from India occur during the wedding season in the country, which begins in the month of April 2010.

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