Goldman (NYSE:GS) Raises Gold Forecast to $1,355 an Ounce

Goldman Sachs (NYSE:GS) upwardly revised its 12-month gold forecast to $1,355 an ounce, an increase of 1.5 percent.

Most of the change was based on the threat of the sovereign debt crisis in Europe, and a long period of low interest rates.

Goldman still adheres to the idea gold prices will fall sometime after 2011, once the Federal Reserve tightens the money supply. Consequently they recommended gold producers to sell their production forward.

The banking giant increased their estimates for every base metal with the exception of zinc, which they cut to $2,225 a metric ton, a decline of 18 percent.