Gold may peak at US$1,300 an ounce in 2010: UBS AG

Central bank purchases will also support bullion prices, Dominic Schnider, head of commodities research at the bank's Wealth Management Research, told reporters Thursday in Singapore.

Bullion for immediate delivery has risen 39 percent this year and reached a record US$1,226.55 an ounce Thursday. Purchases by central banks in India, Mauritius and Sri Lanka from the International Monetary Fund have helped fueled the gains.

Gold prices will average US$1,150 an ounce in 2010, UBS said. Prices averaged US$962.39 an ounce this year.

Schnider did not rule out the potential for gold to move “easily” beyond US$1,500 an ounce on a combination of accelerating inflation, a weakening dollar, increasing cost of production and rising demand.

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