Gold will soon hit $2,000 an ounce, up from around $1,560 an ounce today if the Federal Reserve launches more quantitative easing,  Merrill Lynch economists predict.

Merrill Lynch economists see the Fed launching large-scale asset purchases from banks, injecting them full of liquidity to encourage lending and with it, hiring.

As a side effect to such a policy, officially known as quantitative easing but widely referred to as printing money out of thin air, the dollar weakens and its traditional hedge, gold, rises.

"We think that $2,000 an ounce is sort of the right number," Francisco Blanch, Head of Global Commodity & Multi-Asset Strategy Research at Merrill Lynch, tells CNBC Asia's "Squawk Box." 

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He expects the Fed to initiate an asset-purchasing program of as much as $500 billion in the second half of the year.

"We believe that ultimately the Fed will be forced to do quantitative easing. If it happens in September, as our economists expect, we will get a rally sooner in gold. If it happens after the election (in November), we will get the rally a little bit later; probably we will touch $2,000 an ounce sometime next year."

The Fed has rolled out two rounds of quantitative easing since the downturn, injecting $2.3 trillion into the economy in the process.

The Fed's benchmark interest rate, the fed funds rate, remains close to zero, which has further sent gold climbing.

The yellow metal was trading around $300 an ounce a little over a decade ago and hit a record $1,923.70 in September 2011 before retreating to current levels today.

Others say prices are due to gain.

"I just can’t imagine the demand for gold is going down,” says Eric Sprott, the founder and chairman of Canadian fund manager Sprott Inc., according to Bloomberg.

Cooling global economic growth and high debt levels across much of the developing world will keep demand for the precious metal solid.

"I don’t personally see a solution to the problem that we’re in, the financial leveraging issue that we all have where everybody wants to shed debt and there’s no buyers."

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