Gold Reaches Record High, Could Hit $1,300 This Year

Gold prices rose to a record high Tuesday, up about 2% to $1,271 an ounce on the December contract. Gold has risen about 15% this year.

Gold prices could reach a record $1,300 an ounce later this year as investors fearing debt crises and potential inflation from interest rate cuts put more of their money into the precious metal, according to a report in Reuters Tuesday.

Gold could "easily" surge about the $1,300 by the end of the year and increase further in 2011, the wire service said, citing GFMS Ltd. Chairman Philip Klapwijk, whose company published the report. While the U.S. has avoided the sovereign-debt crises that have impacted other parts of the world, that may change, potentially causing devaluation of the dollar, Reuters said, citing Klapwijk.

GFMS's forecast could spur gold investment, which fell 40% for the first half of the year from record highs a year earlier.