HSBC Raises 2009 Gold Forecast to $875 from $825

Source:

"Inflation fears are supporting gold. . ."

HSBC on Thursday raised its 2009 gold price forecast to $875 from $825 an ounce, as inflation concerns spur strong investment demand for gold exchange-traded funds and bullion coins and bars.

"Inflation fears are supporting gold ... Possible USD (U.S. dollar) weakness remains a potential source of support. Stagnant mine output, reduced official sector sales, and robust ETF and retail demand are also supportive factors," James Steel, chief commodities analyst at HSBC, said on Thursday.

Steel kept his silver price outlook unchanged at $12.50 an ounce and platinum outlook at $1,100 an ounce for this year. However, he cut his palladium outlook to $225 from $250 an ounce, citing sliding auto production.

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