According to HSBC’s reports, purchase of gold will increase despite the weakening of the USD and the recession. This has prompted the average price of gold will increase to around $915 an ounce in 2008, rising from the earlier predictions of $850 an ounce.

The US dollar, though being an important factor for determining gold prices, inflation concerns and a resumption in Fed rate cuts may offset the bearish effect of recent dollar strength,” HSBC Securities metals analyst James Steel wrote in a research note.

Steel had predicted the rate of gold to increase to $850 from $725 for 2009, and to $725 from $650 for 2010. On Friday, spot gold traded at $928 an ounce, silver was quoted at $18.20 and platinum fetched $2,178.