JPMorgan lifted its 2009 price forecasts for gold and silver on Friday and said new record highs for gold at $1,050-1,100 were likely in early 2010.

In a research note, the bank said it has revised its 2009 price view for gold up to $948 an

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ounce from $939 an ounce predicted in July. It said it now sees silver at $14.30 an ounce, against a previous forecast of $13.90.

For next year, it lifted its gold and silver forecasts to $1,006 an ounce from $950 and $15.80 an ounce from $13.40 respectively — a rise of nearly 18 percent in silver’s case.

“Overall we are looking for gold to average around $1,000 an ounce in the fourth quarter…but new highs between $1,050 and $1,100 look likely for early 2010,” it said.

The bank said, however, that investors may currently be paying too high a price for gold as an inflation hedge.

“We do remain concerned that gold as an ‘inflation trade’ is both expensive and premature,” it said. “But the flows speak for themselves, as gold has been the overwhelming beneficiary of investment allocations to commodities all year.” Spot gold hit record highs on three successive sessions this week, peaking at $1,061.20 an ounce on Thursday.

Early on Friday it was at $1,048.10 an ounce.

The bank also lifted its forecasts for base metals copper, aluminium, nickel, zinc and lead for 2009 and 2010, though it said it expects 2010 to be “a year of consolidation in the base metals, as opposed to a year of new highs or lows in price.”

Source – http://www.cnbc.com/id/33239364