Gold News

Gold forecasts go through the roof

UBS has become the latest financial institution to raise its gold price forecast after September's bull-run on the precious metal.

Not for 27 years had the markets seen so many investors looking to buy gold, with UBS now taking into account the safe-haven value gold showed through the worst of the US financial turmoil.

The brokerage's 2008 gold forecast was claimed by Reuters to have been raised to $760 per ounce from $650 per ounce, with the 2009 forecasts showing an even brighter prospect, in the shape of a $150 rise, from $550 per ounce to $700.

UBS was reported to have claimed that its forecast hike was motivated by positive signs if adaptation in the gold market to the newly higher prices of recent years.

Evidence of this new adaptability was given in the form of gold jewellery demand, which has continued to rise despite higher prices.

UBS is not alone in revising bullion forecasts up – Barclays Capital in mid September amended its forecast up to $750 for the final quarter of 2007, on the back of a poor US growth outlook and other positive factors.

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