Royal Bank of Scotland (RBS): Gold Will Average $1,750 This Year

Gold is the only metal worth buying right now. Or at least that’s what the Royal Bank of Scotland Group (NYSE: RBS) is telling investors.

This morning RBS lowered its 2012 outlook for every metal aside from gold. The bank cut its forecasts for silver, platinum, copper, aluminum, lead, zinc and nickel. But RBS expects the price of gold – currently $1,637.60 an ounce – to average $1,750 an ounce in 2012.

The bank called gold “an attractive buying opportunity” at its current price, and anticipates an upswing in gold over the next few months.

Our own Kevin McElroy has remained steadfastly bullish on gold despite the yellow metal’s 20% fall-off during the last four months of 2011 after peaking at $1,888.70 an ounce on August 23. Kevin wrote last week that he fully expects gold to outperform 30-year U.S. Treasury bonds – which gained 20% last year – in 2012.  

“I expect gold to outperform Treasuries this year, along with nearly every other commodity,” Kevin wrote.

How high might gold rise in 2012? A record level of more than $2,000 an ounce, according to an annual survey of industry predictions by the London Bullion Market Association – comprised of 26 of the largest bullion-dealing banks and trading houses in London. All but three of the forecasters surveyed predicted that gold would surpass the record high of $1,920.30 an ounce.

The Royal Bank of Scotland’s outlook for silver wasn’t quite as optimistic. The bank expects a modest 10% increase for silver, to $33 an ounce from its current level of $30. That’s down 13.5% from RBS’s previous silver forecast.