Goldman raises gold and silver forecasts on anticipated dollar weakening

Goldman Sachs (GS.N) said it is raising its near-term gold and silver forecasts on...

Goldman Sachs (GS.N) said it is raising its near-term gold and silver forecasts on expectations for a weaker dollar, and as interest in the precious metal as a haven from risk continues to underpin prices.The bank said it has raised its three-month gold forecast to $700 an ounce from $690, its six-month price view to $785 from $730 and its 12-month forecast to $795 from $710.It sees silver at $10.04 an ounce in three months, up from a previous forecast of $9.90, at $11.08 an ounce in six months, against $10.30, and at $10.30 in 12 months, against $9.20."We are raising our gold price forecasts in line with Goldman Sachs economists’ currency revisions toward a weaker U.S. dollar outlook," the bank said in a research note."We have long held that gold trades inversely with the U.S. dollar, which historically has explained over 90 percent of gold price movements," it said.Gold, which is often bought as a currency hedge, often benefits from weakness in the dollar.The current turmoil in the financial markets and worries over the outlook for the global economy are also likely to boost the precious metals’ appeal as a haven from risk, Goldmans added."We believe that the pervasive negative sentiment surrounding most financial assets may continue to support gold prices at the margin," it said.