Citigroup has today (March 18th) increased its Gold Price forecasts for 2009 and 2010 as safe-haven demand for the yellow metal continues to grow, Bloomberg reports.
The major US financial institution now believes prices may average $856 per ounce this year, representing a 3.6 percent rise from its January estimate of $825 per ounce.
Furthermore, the company indicated that Gold Prices will sit at $925 per ounce on average in 2010, a figure which is 2.8 percent higher than its previous prediction of $900 per ounce.
Detailing the decision in a report, analysts Alan Heap and Alex Tonks are quoted by the news provider as writing: "Investors are concerned about a systemic collapse of global financial markets and mechanisms.
"Investors may also be concerned about an ultimate reversal of current deflation, and a resurgence of inflation is the ultimate consequence of massive monetary stimulation."
The news comes barely two weeks after Bank of America Merrill Lynch increased its 2009 forecast from $875 per ounce to $1,000 per ounce and its 2010 call from $900 per ounce to $1,050 per ounce.
"We believe the outlook for precious metals is much more promising," the bank was quoted by Market Watch as saying.
"Increasing inflation expectations, a shift toward liquid assets, a rapid increase in credit risk, falling stock markets and a wave of monetary and fiscal policies are contributing to fuel a rally in gold prices."
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