Don't give up on Gold yet Economist Shayne Heffernan said in a note to traders today, he added that Gold may still reach $2000 in 2013.

Central banks across the globe continued the now established trend of net purchasing with demand in Q1 2012 reaching 80.8t. Demand was driven by Eastern Europe with Russia and Kazakhstan adding to their holdings and accounting for a substantial amount of the purchasing. Mexico's central bank made the largest single purchase of 16.8t. The main driver for this demand by emerging market central banks is the need to diversify their holdings.

First quarter gold investment demand (including gold bars, coins, ETFs and similar products) grew by 13% year-on-year to 389.3t. In US$ terms, this equated to a demand value of US$21.2bn, 38% higher year-on-year. Increases in demand for ETFs and medals/imitation coins meant that demand reached 389.3t, 45.8t above Q1 2011 despite declines in demand for physical bars and coins.

First quarter demand for ETFs and similar products totalled 51.4t, equivalent to a value of US$2.8bn; in stark contrast to the first quarter of 2011, when the sector witnessed net outflows.

Global gold demand in Q1 2012 was 1,097.6 tonnes (t), down 5% from the high demand levels seen in Q1 2011 (1,150.7t), according to the World Gold Council's Gold Demand Trends report.

This decrease was largely to be expected given the introduction of import taxes in India and high gold prices.

Gold demand value however, showed a 16% increase year on year to an estimated US$59.7 billion.

The average price of gold for the quarter was US$1,690.57, 22% higher than the average for Q1 2011. Demand for the quarter was underpinned by increased demand in China, continued central bank purchasing and inflows into exchange-traded funds (ETFs).

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.