Merrill Lynch, the US brokerage firm, raised its 2008 through 2010 gold outlook, but lowered its forecast for 2006 to $603.35 per ounce from $625/oz earlier, citing a decline in jewellery demand, according to a report.

The company retained its 2007 estimate of $675/oz of gold due to high fabrication demand, lower central-bank sales and growing investment demand, but increased its 2008 outlook by 8 per cent to $650/oz compared to its previous estimate of $600/oz.

For 2009 and 2010, the company revised gold prices upwards to $625/oz and $600/oz respectively, citing positive supply-demand fundamentals for bullion and growing investment demand.