BMO sends gold forecast soaring

BMO Capital Markets has significantly increased its gold price forecasts for coming years, on the back of strong gold prices over recent weeks.

The financial group raised its gold forecasts for 2008 and 2009 to $800 per ounce, while long-term forecasts were revised up to $600 ounces.

BMO thus became the latest of many financial groups to revise upward its predictions for movement in the gold market, with the breaching of the $760 price barrier for spot gold making traders take notice of the precious metal.

Analysts at BMO highlighted the positive fundamentals for gold that were impacting positively on metal prices as a whole.

"Reflecting the view that other precious metals prices cluster around the broad trends set out by gold and considering each metal's unique fundamentals, we have also increased our price forecasts for silver, platinum, palladium and rhodium, " said BMO.

Just over a week ago, Morgan Stanley was another prominent financial institution to redress its gold forecasts in light of soaring spot gold prices, with the group sending its own 2008 forecast up to the $800 per ounce mark.