NEW YORK (Commodity Online): Almost all analysts have revised their gold price forecast in the recent past and latest in the list is JP Morgan.

JP Morgan analyst John Bridges said gold will hit a whopping $1,400 to $1,450 an ounce in the second quarter of 2010 before slipping back.

According to Bridges, there is literally no reason to believe that the gold rally is going to end soon. According to a report in Financial Post, his main rationale for this argument is US dollar weakness, which he expects will continue until mid-2010. Forex strategists at JP Morgan are calling for the greenback to weaken to a new all-time lows against the euro (1.62) and the yen (82). While they do not expect the dollar to fall off a cliff, they think it will remain weak because of the Federal Reserve’s belief that core inflation is not a problem right now.

According, the liquidity spigot remains open and the USD remains under pressure, Bridges wrote in a note to clients.

“Portfolio assets — currently still too overweight cash — will continue to seek out higher yielding assets and in doing so pressure the USD lower, and gold higher.”

Bridges also pointed to some other factors that will continue to drive gold: “extreme discomfort” over US interest rate settings, gold sellers sitting on the sidelines in anticipation of higher prices, the fact that central banks are selling much less gold than they used to, ongoing strong investment demand, and some recovery in physical demand.

But his longer-term view is not quite so bullish. After gold peaks in mid-2010, Bridges expects it to slip to $1,225 an ounce in 2011, and his long-term price forecast is a more modest $950 an ounce.

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