LONDON – Record-breaking gold will likely surge past $1,600 per ounce for the first time later this year, driven by fears over high inflation and low global interest rates, consultancy GFMS forecast Wednesday.

"We would not be surprised ... to see gold break through $1,600 before the end of the year," said GFMS chairman Philip Klapwijk in the group's latest report.

The forecast, which was unchanged from the previous prediction given in January, comes after gold hit a record $1,478.18 per ounce in London on Monday.

Klapwijk added: "Investors continue to be concerned about the outlook for inflation, with governments in general showing little appetite to tighten monetary policy.

"And, with the spotlight also shining on the state of government finances, there is every reason to believe that investors will remain focused on the gold market.

"Furthermore, growing price acceptance by consumers will help lift jewellery demand ... and provide a firm platform for investors to take gold higher," Klapwijk said.

In recent weeks and months, gold has surged ahead as investors sought safety amid fears over the weak dollar, high inflation, Middle East unrest and eurozone debt.

The glamorous precious metal, whose two main drivers are jewellery and investment buyers, is widely regarded as a safe haven in times of economic and political uncertainty, and a good store of value amid soaring inflation.

Klapwijk told reporters that in real terms, today's prices were still below historical peaks. Gold trading at $850 an ounce in 1980 was the equivalent of $2,248 in 2010, he said.