Societe Generale lifts precious metals forecasts

Austrian gold ducat coins are pictured after being minted at the Austrian national mint in Vienna April 8, 2009. One ducat is worth approximately 204 Euros.

LONDON (Reuters) - French bank Societe Generale has updated its 2009 precious metals forecasts, and said it now sees gold at $865 an ounce this year.

The bank also raised its 2009 price view for platinum to $1,059 an ounce from $876 forecast last month. It lifted its outlook for palladium prices to $210 an ounce from $205.

It also said it now sees silver at $12.00 an ounce.

Gold has been supported by huge investment buying in the first quarter, rising to a peak for the year of $1,005.40 in February, but rising prices have brought hefty scrap supply onto the market, capping gains.

As equity markets have stabilised and investors have become more optimistic the global downturn is bottoming out, gold prices have slipped. However, analysts say fears inflation will rise as a result of fiscal stimulus may limit losses.

"Whether renewed investment buying on inflationary expectations will be strong enough to take the place of risk-averse investment is open to question," Societe Generale said in a note.

(Reporting by Jan Harvey; Editing by James Jukwey)