Gold will jump to $5,000 an ounce from current levels over $1,500 an ounce as supplies dwindle in the coming years, according to Standard Chartered, a U.S. financial institution.

"There are very few large gold mines set to commence operation in the next five years," says Standard’s analyst Yan Chen, CNBC reports.

"The limited new supply comes at a time when central banks have turned from being net sellers to significant net buyers of gold. The result, in our view, will be a gold market in deficit, even assuming flat growth in demand. With the supply-demand balance so out of kilter, we see the gold price potentially going to US$5,000/oz."

(Associated Press file photo)

Standard Chartered bases its forecast after analyzing hundreds of mines around the globe and concludes that annual gold production will rise just 3.6 percent over the next five years.

Demand for gold has surged in recent years, as the precious metal is often used as a hedge against a weakening dollar.

Other analysts are predicting gold to continue rising this year, even before supply issues become a factor, including Philip Newman, research director of the GFMS research firm, who is predicting gold to close 2011 at $1,600 an ounce.

Monetary policy in the U.S. will remain loose as long as the economy stays sluggish, and loose monetary policy (i.e. low interest rates and rising money supply) weakens the dollar, which is good for gold.

"The U.S. governments and all other governments frankly, in a sense, still have to maintain fairly loose monetary policy given how slow or how stubborn the rise in GDP growth has been and continues to be," Newman tells Kitco News, which covers metals.