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Numis increases 2009 Gold Price forecast

Numis Securities has today (March 12th) announced that it is raising its Gold Price forecast for 2009 from $700 per ounce to $900 per ounce, Reuters reports.

According to the firm, the all-time high of $1,030 per ounce - achieved in March 2008 - was brought about by inflation fears linked to the continued rise in commodity prices.

With that in mind, the company has also lifting its 2010 and 2011 Gold Price predictions from $750 per ounce to $850 per ounce, a move motivated by risk aversion and a potentially weaker dollar.

In a release quoted by the news provider, Numis noted: "Gold as an investment vehicle and quasi-currency remains relatively buoyant, supported by continued risk aversion from investors.

"The massive global monetary and fiscal stimuli, including US and UK quantitative easing, may result in a shift from a potentially deflationary environment to an inflationary one."

The news comes after Citigroup suggested last week that gold buying looks set to continue as investors are concerned about the possibility of further bank bail-outs.

In a report quoted by Bloomberg, lead analyst Johan Bergtheil said: "Right now gold reflects the fact that many banks would collapse without government support and the fact that such government support is unprecedented in terms of monetary stimulus compared to the past."

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