HSBC said (08 Jan 09) it is raising its 2009 and 2010 gold price forecasts on expectations that the faltering global economy will prompt investors to buy into the metal as a haven from risk.

However, the bank cut its 2009 price view for platinum by 15%. It sees demand falling as the economic slowdown hits industrial users of the white metal, such as carmakers.

HSBC raised its 2009 gold forecast to US$825/oz from US$800/oz, and its 2010 price view to US$775/oz from US$725/oz, but left its long-term forecast at US$700/oz.

"We believe gold will attract safe-haven buying from risk-averse investors this year, as economic uncertainties are likely to persist for the foreseeable future," HSBC analyst James Steel said in a research note.

Demand for gold coins and bars is likely to remain strong in 2009, he said.

HSBC also sees mine supply falling on production cutbacks, declining ore grades and power constraints, and expects official sector selling, largely from central banks, to decline further.

The bank cut its platinum forecast to US$1,100/oz from US$1,300/oz for 2009 and its 2010 price view to US$1,500/oz from US$1,700/oz. It is leaving its long-term platinum view unchanged at US$1,450/oz.

"Weak automotive demand for platinum will almost assuredly carry over into 2009, and other categories of industrial demand, including glass, chemicals and electronics, are also likely to decline this year," said Mr Steel.

"We anticipate that platinum will move from a deficit in 2008 to a modest production/consumption surplus this year," he added.

HSBC also reduced its palladium price view for 2010 to US$315/oz from US$340/oz and its long-term forecast to US$340/oz from US$360/oz, and cut its 2009 silver forecast to US$12.50/oz from US$13.50/oz, citing slowing demand.

It said it expects the rate of silver mine output growth will be lower in 2009 than previously forecast, but added that this should be offset by a decline in industrial demand and buying for the photography sector.