HSBC predicts rise in gold price

According to HSBC’s reports, purchase of gold will increase despite the weakening of the USD and the recession. This has prompted the average price of gold will increase to around $915 an ounce in 2008, rising from the earlier predictions of $850 an ounce.

The US dollar, though being an important factor for determining gold prices, inflation concerns and a resumption in Fed rate cuts may offset the bearish effect of recent dollar strength,” HSBC Securities metals analyst James Steel wrote in a research note.

Steel had predicted the rate of gold to increase to $850 from $725 for 2009, and to $725 from $650 for 2010. On Friday, spot gold traded at $928 an ounce, silver was quoted at $18.20 and platinum fetched $2,178.