Mitsui Global Precious Metals lifted its 2009 price forecasts for platinum, palladium and silver on hopes a stabilisation of the economic downturn will help the demand outlook for the industrial precious metals.

It also raised its price view for gold, saying it is medium term bullish, but short term wary towards the yellow metal.

The company upped its platinum forecast for this year to $1,200 an ounce from a previous forecast of $1,052. It raised its 2009 palladium price view to $260 an ounce from $236 previously.

Mitsui said while demand for the metals from the automotive sector -- which account for around half of annual consumption of the two metals -- remains depressed, other factors could provide some support.

We continue to believe strong Chinese and Hong Kong demand, keen investor interest -- particularly if a U.S. exchange-traded fund becomes a reality -- and the adequate response from producers to take excess supply off the market will help to offset a very poor auto market situation, it said.

This of course does not imply everything is rosy in platinum and palladium's world - not at all - but it does mean we are no longer negative on their outlook, and indeed are sitting on the mildly bullish fence.

Refiner Johnson Matthey (JMAT.L: Quote) also said in its widely anticipated Platinum Report released on Monday that it expects strong jewellery demand from China and increased investor interest to help offset falling automotive buying this year.

Mitsui hiked its price forecast for silver by 28 percent to a 2009 average of $13.10 an ounce from a prior view of $10.26.

Silver will continue to take strength from gold, but while our gold forecast is not screaming higher, we are however moving into a more optimistic place for industrial metals, it said.

The company also raised its price view for gold, which could benefit from fears over rising inflation in the future as a result of governments' measures to tackle global economic crisis. However, Mitsui said this factor was likely to take time to filter through.

It said it expected gold prices to average $920 an ounce this year, up from a previous forecast of $906.

(Reporting by Jan Harvey; Editing by Keiron Henderson)

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