UBS Boosts '09 Gold Forecast to $1,000

Reuters
Wednesday, Feb 4, 2009

UBS lifted its 2009 average gold price forecast to $1,000 an ounce from a previous price view of $700, citing expected strong safe-haven demand.

The Swiss bank said it expected investment demand for the precious metal to double in 2009 compared to 2007.

It said gold had held its ground early in the year despite its usual drivers -- the dollar, oil prices and inflation -- all moving against it.

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"Normally we would have expected this set of circumstances to trigger steep declines in the gold price, but the metal has remained firm in dollar terms and strong in some of the other major currencies," it said.

UBS said it sees safe-haven demand for the metal tailing off next year, but raised its 2010 gold forecast to $900 an ounce from $700.

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