Despite gold prices falling again this week, the metal is still the top performing commodity of 2011.

The Sydney Morning Herald bases its evaluation on gold trading at an average of $1,589.88 an ounce for the year with a peak value of $1,921.15 an ounce on Sept 6.

Even if volatility marked gold trading for the last six months of 2011, with spot pricing in Asian trading falling 0.8 per cent to $1,591.20 an ounce on Tuesday, Australia's Bureau of Resources and Energy Economics forecast in its December quarterly report that gold prices in 2012 would still go up 17 per cent to $1,850 an ounce.

The Bureau's forecast is, however, more conservative than the bullish outlook in September by major financial institutions which predicted that gold price would exceed $2,000 an ounce and rise higher in 2012.

Their forecasts ranged from Barclays Capital's $1,875 to Citigroup's $2,000 to $2,500 range which it described more as a brief spike.

The bureau also forecast the country's gold exports on 2011-12 would go up 45 per cent to $18.9 billion.

It explained its forecast to gold prices being supported by low interest rates in the U.S. and Europe, changes to the balance of some central bank portfolios, and continued investment and fabrication demand from consumers in developing nations. The bureau added that extended periods of financial market instability could hike investment demand for gold and place more upward pressure on gold price.

Zak Dhabalia, chief gold trader of Goldman Sachs, wrote in a note to clients that he expects gold prices to achieve new highs and register its 12th successive year of gain. He said that investor and central bank demand for gold would still be the defining influence for the price of gold than the retail investors who were the dominant force behind the rise of gold prices in 2011.

John Embry, chief investment strategist of Sprott Asset Management, told Mineweb in August that gold would likely trade between $1,500 and $2,000 in the next 18 months. In November, he upped his forecast that the price of the yellow metal could possibly exceed $2,500 in the next 12 months.

"Everyone wonders where gold's going and where silver's going, I prefer to look at where are currencies going? Today we're in the later stages of yet another failed experiment in fiat papered currencies and they're losing value at an alarming rate and as a result gold is rising in value denominated in these failing currencies," Embry told Business Television.

"It isn't that gold is in a bubble because it's up in price, it's the fact that the currencies are falling in value almost every day," he stressed.

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