The Erste Group, one of Europe’s largest financial services providers, has just released a report with a 12-month gold price target of $2,000 per ounce, as well as a price trend phase ahead that leaves the price of gold at $2,300 per ounce or higher. In its report, the Erste Group explained that gold is experiencing a renaissance as an investment class amid times of chronic uncertainty.

Standard Chartered Bank issued a comprehensive study last week entitled In Gold We Trust that examines supply/demand trends for gold. According to the bank, “limited gold production, buying by central banks and increasing demand from India and China – can potentially drive the gold price to $5,000 per ounce.”

Standard Chartered’s comprehensive study of 375 gold mining projects found that the ten-year bull market in gold has done little to drive gold production. A lack of new capital and a shortage of large gold mines mean it will be difficult for the industry to compensate for the depletion caused by aging mines and falling grades.

Greece’s sovereign debt and potential default is causing widespread fear that other debt-laden European nations like Spain, Portugal and Ireland will similarly fail to right their economic ship and .declare default.

In early April 2011, Eurogroup Chairman Jean-Claude Juncker warned Greece of the importance of controlling spending, a day after news that the country’s 2010 budget deficit overshot forecasts at over 10 percent of GDP. On May 9, Standard and Poor’s lowered Greece’s credit rating into junk territory to B, one notch above Pakistan’s credit rating.

According to the World Gold Council, global demand for gold will remain strong throughout 2011. The preeminent precious metals consultancy’s just-issued “Gold Demand Trends” stated the factors that boosted demand during the first three months of the year are predicted to support gold through the remainder of the year.

Central banks are buying more gold for their reserve allocations and “one off” purchases by governments can have a significant effect on the gold markets. The list of countries that have purchased gold since 2009 is large and growing. China, Russia, India, Saudi Arabia and Mexico have been the biggest buyers. Other gold-buying countries include Kazakhstan, Sri Lanka, Mauritius, Venezuela, Bolivia, the Philippines, Thailand and Bangladesh.

Congress and the White House have been given more time to reach a compromise on raising America’s debt limit. Treasury Secretary Timothy Geithner said the U.S. will have three weeks more than previously expected before hitting its borrowing limit. The U.S. can borrow until Aug. 2 after reaching the $14.29 trillion limit because of “stronger-than-expected tax receipts” and by taking “extraordinary measures” such as suspending the sale of bonds to finance state and local infrastructure projects, Geithner said in a letter to congressional leaders. He previously said the deadline would be July 8.

On April 14, the President signed a bill repealing an unpopular tax reporting provision in last year’s health care legislation that would have required all businesses to report transactions totaling at least $600 in a year for goods and services to the IRS. Although the proposed legislation would have adversely affected thousands of businesses, there was strong concern that this stealth legislation would have disproportionately affected people who own precious metals since the sale of a single ounce of gold would have triggered the reporting requirements.

China is one of the most important markets for gold, comprising 11% of global demand in 2009, up from 5% in 2002. The liberalization of gold by the People’s Bank of China in 2001 has impressively expanded consumer demand, which increased by 106% from 2002 to an estimated 443 tons in 2009, or an average of 8% per year.

India is the world’s largest gold consumer market, accounting for a staggering 15% of global demand. By 2020, its already massive consumption of 963.1 tons in 2010 will increase to an estimated 1200 tons per year according to the World Gold Council. India’s story is one of saving, rising real income levels, risk aversion and the cultural importance of gold, all factors which continue to drive demand in this important segment of the global market.

Military action in the Middle East and North Africa has prompted analysts from Standard Bank Plc, MF Global and Shanghai CIFCO Futures to forecast higher prices for gold. Allied forces are expanding their military air campaign against Libya in an effort to protect its civilians, adding to the tension level in Middle East and North Africa. Also, Yemen’s President Ali Abdullah Saleh suffered recent defections of generals and ambassadors as people in Yemen rebel against his regime.