By Andy Sambidge
Dubai broker also expects gold price to hit $2,100 per oz by 2014, up $600 on current level
Investors remain bullish on commodities with more than half increasing their commodity allocation over the next 12 months, according to a survey conducted by Dubai-based Trust Securities.
The company said its research suggested that gold trading would reach $2,100 per oz in 2014, compared to current levels of just under $1,500.
The survey, which was conducted as the Japanese nuclear crisis and Middle East unrest unfolded, revealed that 85 percent of investors expect flows to be at or above last year's levels and almost half of them are seeking returns of more than 10 percent.
Asim Khan, CEO, Trust Securities, said: "Investors expect to see continued strong demand from the emerging markets and they predict another strong year for commodities.
"In addition, the heightened geopolitical concerns, turmoil in the energy markets and rising inflation concerns will continue to cast commodity assets in a favourable light."
He said the survey showed that the appetite for increased direct exposure to commodities was still high at 75 percent.
More than 60 percent of institutional investors are seeking active management strategies over the next 12 months, he added.
Commodities have outperformed stocks, equities and the dollar index for consecutive months in 2011. Growing industrialisation and urbanisation in many countries, primarily China and India, are fuelling demand for commodities, and this is pushing up prices.
Sean Williams, head of commodity investment sales at Trust Securities, added: "The booming economies of China and India will continue to drive strong demand growth for most commodities over the next ten years.
"As a consequence, the price outlook for those commodities where physical supply is struggling to keep up like oil, coal and copper is very good."