Fueled by fears over the escalating global financial meltdown, prices of gold are projected to increase through the end of this year and on into 2012 as investors flee to the metal.

Mining companies said the precious commodity may hit $2,000 an ounce by the end of 2011, and rise further to $2,300 by the close of 2012.

Gold prices have jumped 40 percent in the last 12 months, and are presently trading at $1,780 per ounce. The highest price recorded was $1,921.15 on Sept. 6.

Political Factors

The revolutions in the Middle East, U.S. deficit concerns and debt problems in Greece and other European nations are all contributing to gold's rise.

But while gold prices soar, the same cannot be said of the trading performance of the gold-producing companies, as these manufacturers have yet to post substantial gains.

Barrick Gold, Gold Field's, Newmont Mining Corp., Yamana Gold and Kinross Gold are just some of the global players in the gold production industry. Most of these companies' equities have not been performing well.

Producers Languish

Analysts said the notion of having gold bars in their hands may reassure investors. On the other hand, the realities of mining companies and production, such as labor and employment struggles, tax raises and delayed production targets, appear less interesting and unreliable.

To close the gap between gold prices and mining companies equities, gold miners have sought to raise dividends.

Newmont recently introduced a dividend structure to hike annual dividend by 20 cents for every $100 rise in the gold price. On Monday, it announced an additional 10 cent increase for every $100 above $2,000.

Gold Resource Corp., a U.S.-listed miner, plans to pay dividends in actual gold.