February 5, 2009 / 1:05 AM / 11 years ago

Goldman Sachs lifts gold price forecast to $1,000/oz

Gold bars are displayed at the Ginza Tanaka store in Tokyo in this September 18, 2008 file photo. REUTERS/Yuriko Nakao

SINGAPORE (Reuters) - Investment bank Goldman Sachs raised its forecast for the price of gold to reach $1,000 an ounce in the next three months from its previous forecast of $700 due to rising investor demand for safe haven assets.

“The gold price rally has been driven by surging demand for gold in all forms: physical gold, exchange-traded funds (ETFs), and futures contracts as investors seek ‘a safe store of value’ amid the financial distress and inflation risks,” it said in a report.

It also noted that a strong relationship betwween the price of gold in U.S. dollars and the exchange rate of the dollar against other currencies has begun to break down. Gold was trading at $903.15 an ounce by 0038 GMT, down $1.70 from New York’s notional close.

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