Goldman (NYSE:GS) Predicts $1,650 Gold in 12 Months

Goldman Sachs (NYSE:GS) upwardly revised its 12-month estimate for gold prices, increasing them from previous 12-month projection of $1,365 to $1,650. Gold is already closing in on the prior numbers.

Also increased was the three-month and six-month gold price estimate by Goldman, which rose to $1,400 an ounce and $1,525 an ounce.

Goldman said in a note to clients, "With U.S. real interest rates pushing lower off the slowdown in the pace of the U.S. economic recovery and the growing prospect of another round of quantitative easing, we expect gold prices to continue to climb."

Expectations are inflating the money supply, or quantitative easing, will be again put into place in November 2010.

Until those misguided policies change, gold prices will continue to move up, although there will surely be occasional corrections along the way.