Widening gap between production and jewellery demand could lead to a strong rally in gold prices this year, according to the latest forecast by Gold Fields Mineral Services (GFMS).The London-based consultancy projected that gold prices may hit the psychological barrier of $1,100 per ounce this year. Higher prices would largely be driven by existing issues including dollar weakness.The view is significant as the metal not only breached the GFMS target of $1,000 last year but hit a life-time high of $1,011.25 on March 17.According to a release issued by GFMS today, "the hefty correction in gold prices in the last few weeks was not a surprise at all as the speed of the earlier gains looked a little unsustainable. However, we don't think current hesitancy means it's game for the rally."
