Goldman Sachs increases gold price forecast

A major financial institution announced yesterday (February 5th) that it is increasing its Gold Price forecast, Reuters reports.

Goldman Sachs, the world's fourth-largest bank holding company, has revealed that it has upped its three-month prediction from $700 per ounce to $1,000 per ounce.

Explaining its decision in a note, the company noted that investors are increasingly opting to Buy Gold as concerns over the level of debt accrued by global economies is steadily increasing.

One section, quoted by the news provider, read: "The gold price rally has been driven by surging demand for gold in all forms: physical gold, exchange traded funds and futures contracts and investors seek a 'safe store of value'.

"It is also important to emphasize that the recent strong demand for gold has not been irrational, but rather pretty much in line with the probabilities of financial and sovereign default."

Goldman Sachs has become the latest bank to up its forecast in the past two weeks, following similar moves by Morgan Stanley and UBS, which has revised its predictions twice.

Morgan Stanley alluded to the falling investor confidence in the dollar - which tends to move in the opposite direction to gold prices - when it announced its decision.

"Gold prices are likely to be higher by year-end in the context of aggressive monetary stimulus and falling confidence in paper money," it claimed, according to Reuters.

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