Fears of government deficits and renewed money printing will drive the metal to record prices, Austrian bank argues

When it comes to gold, Warren Buffett doesn't know what he's talking about, according to one of the metal's most ardent European fans.

Gold is likely to hit a record high of $2,000 (U.S.) an ounce over the next year, driven by fears over government deficits and worries that central banks will be forced into more money printing, according to Erste Group, an Austrian bank.

The bank believes the precious metal will eventually rise even further, reaching at least $2,300 an ounce, which would match its high from the early 1980s if inflation is taken into account. In a recent report to clients the institution says that given the instability in the global financial system, its price forecast "could be on the conservative side."

Erste Group has been producing annual forecasts of gold prices since 2007, and has been bullish over the period - an accurate call, given gold's surging fortunes over the past five years.

This year's 120-page report includes such quirky measures as how many litres of beer can be purchased at Munich's Oktoberfest each year with an ounce of gold. It also features a lengthy discussion on Mr. Buffett's well-known antipathy toward gold, which the bank views as an irrational form of "aurophobia."

David Fuller's view The author of report referred to above is Ronald-Peter Stöferle, a superb analyst and authority on both gold and oil, and veteran subscribers may recall his earlier reports which Fullermoney has been pleased to post.

I have been studying the full report; it is a good read and I will post it for subscribers tomorrow.