Gold the worlds safe haven investment had it’s price target increased for the next year.  Expectations of a pick-up in demand for jewellery has prompted private bank Julius Baer to upgrade its forecast for the price of gold.

Stephan Mueller, who works on product management and development at Julius Baer, said jewellery demand would pick up and therefore support prices into next year as investors took advantage of the current lower price, which this morning stood at $951.

Mueller Said “We expect Exchange Traded Fund (ETF) demand to stay strong in the long term, as an increasing number of investors view gold as a strategic part of their asset allocation.”

“In order to stay competitive and move out of the current recession as quickly as possible, it is in the interests of governments to keep their interest rates low and their currencies weak, which supports gold as the residual currency,” Nicholas Paler reports from Citywire.

As a result, he said the group had increased its forecast for gold to be trading at $925 an ounce at the end of 2009, up from $875, and to rise to $1,050 in 2010, up from its previous view of $900.

Here is a 1 year chart of the gold ETF (GLD) below:

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