Goldman Sachs increases Gold Price forecast

Goldman Sachs announced today (December 3rd) that it has lifted its 12-month Gold Price outlook to $1,350 per ounce.

On a day when the yellow metal touched a record $1,227 per ounce, the giant bank holding company revealed its new prediction, which is up from a previous estimate of $950 per ounce.

In addition, the New-York based institution claimed in a new report that gold is likely to average $1,265 per ounce in 2010, despite the threat of the US tightening its monetary policy.

"With the US Federal Reserve expected to keep its short-term nominal interest rate target near zero through 2011, we expect the low US real interest rate environment to continue to provide strong support for Gold Prices in 2010 and 2011," read one section.

Those sentiments were strongly corroborated last week by Eugen Weinberg, an analyst at Commerzbank, which is the second-largest bank in Germany.

In a television interview with Bloomberg, he noted that inflation fears and ever-increasing central-bank buying are substantially boosting gold investment levels.

"Speculators betting on higher prices have a very good argument on their side," he told the news provider.

"It's definitely investment demand that is pushing prices higher."

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