A node performing analog network coding simply forwards a signal it receives over a wireless channel. This allows for a (noisy) linear combination of signals simultaneously sent from multiple sources to be forwarded in the network. As such, analog network coding extends the idea of network coding to wireless networks. However, the analog network coding performance is limited by propagated noise, and we expect this strategy to perform well only in high SNR.  In this paper, we formalize this intuition and determine high-SNR conditions under which analog network coding approaches capacity. We show that  analog network coding is near-optimal under these conditions in a wireless relay network. We then demonstrate by an example that analog network coding can perform close to capacity also in the  multicast case.