But prices could plateau in 2012 as the global economy gathers momentum, quantitative easing measures that have flooded the markets with cheap money are reined in and interest rates turn higher, analysts say.

A poll of 65 analysts conducted by Reuters in early January found a median 2011 gold price forecast of $1,450 an ounce, 18 percent higher than 2010's average London Bullion Market Association (LBMA) gold fix of $1,225.60 an ounce.

The forecast is also just above last year's record high of $1,430.95, and clearly outstrips an average forecast of $1,228 an ounce returned by a similar poll conducted last July.

"The same reasons that were behind gold investment in 2010 will also drive prices in 2011," said Bayram Dincer, an analyst at LGT Capital Management in Switzerland.

"You may have some dollar devaluation, and also an expectation that the Federal Reserve won't raise interest rates," he said. "The fact that people will continue to hold gold and further increase investment in gold makes us very bullish for the precious metal."

Historically low interest rates in much of the world have been a major support to gold prices in recent years. Low rates cut the opportunity cost of holding non-interest-bearing gold.

While fiscal deficits and sovereign debt are likely to dog Europe and the United States, rising inflation in fast-growing economies like China, India and Brazil are also likely to lift the metal's allure as hedge against rising prices in those areas, analysts say.

The poll showed analysts expect gold prices to rise throughout the year, from $1,400 an ounce in the first quarter to $1,432 in the second, $1,477 in the third and $1,520 in the final three months of the year.

Tuesday in London, spot gold was last at $1,326.90 an ounce, down 0.5 percent on the day. U.S. gold futures for February delivery were down 1.3 percent at $1,327.00 an ounce. Gold climbed to a record $ 1,431.25 on Dec. 7.

But in 2012, expectations are tempered, with an average price of $1,420 an ounce predicted.

"We see some weakness emerging in the second half and that is a pattern in 2012 as the global economy returns to health," said London-based Credit Agricole analyst Robin Bhar.

"As all the classic measures of financial health start to normalize, the great trade that we've had in gold will start to unravel, and we will see a risk-on mentality."

The same concerns that are seen lifting gold to record highs are set to benefit silver, which is seen averaging $29.83 an ounce this year, up from $20.19 last year. The average 2011 silver forecast returned by the July poll was $19.00.

Silver touched a near 31-year high at $31.22 an ounce earlier in January.

The grey metal, which unlike gold has a large industrial component to its demand base, is also expected to peak in the fourth quarter at $31 an ounce, before easing back in 2012 to around $27.90 an ounce — still a historically strong level.

A recovery in industrial production is expected to benefit silver, which is widely used in electronics manufacturing.

"China and developed countries (are the main regions driving demand), as silver is used in solar power panels, plasma display panels and information technology," noted Koichi Iwanaga, general manager of commodities at Japan's Sumitomo Corp.