FXStreet (Mumbai) - 'Gold Survey: Q4 2015 Review and Outlook', conducted by GFMS Thomson Reuters, showed that gold supply dropped by 7% in the quarter ended December 2015 due to an estimated 4% drop in global mine output, the largest quarterly reduction since 2008. Globally, physical gold demand rose 2% yearly in Q4 2015, as a strong pickup in net official sector (mostly by central banks) purchases and a moderate increase in retail investment were partially offset by reduction in demand from the jewellery and industrial sectors. GFMS noted in its report, "Global gold prices are set for a gradual recovery in 2016, particularly in the second half, driven largely by improving fundamentals, as we expect to see a rebound in pent-up demand from Asia and a further contraction in global mine production." "We are likely to see only two small rises by the FED going forward, at most. This should again strengthen market sentiment. We expect a slow recovery in 2016 in dollar terms, with the gold price trading above $1,200/oz towards the end of the year, and averaging $1,164/oz." For more information, read our latest forex news.