Gold is poised to hit US$1,000 an ounce soon after breaching US$900 yesterday on speculation that an imminent cut in United States interest rates will weaken the US dollar further and raise the appeal of the precious metal as an alternative investment vehicle. Barely two weeks into the new year, gold has gained 9.4 per cent in value, trading as high as US$914.30 an ounce for the first time, while the dollar has lost more than 2 per cent against the euro. The metal's high face value is attributable to inflation fuelled by a weaker dollar. When adjusted to the movement of the US urban consumer price index, the metal's Hong Kong close yesterday at US$907 an ounce - up US$15.50 from Friday's level - was equivalent to only US$433.85 in 1981, when gold peaked at more than US$800 an ounce. Shares of some gold producers yesterday bucked a 1.48 per cent drop in the Hang Seng Index. Shandong-based Zhaojin Mining Industry's shares surged as much as 5.33 per cent to HK$42.45 after UBS changed its call to buy from sell and lifted its price target 68 per cent to HK$50.40 on higher gold price forecasts. UBS has raised its average gold price forecast to US$825 an ounce for the year from US$760, and to US$750 an ounce from US$700 next year, on the belief that the US dollar and credit concerns would continue to drive buying of gold. The Swiss bank also has increased its long-term gold price from US$440 an ounce to US$650. Although Zhaojin closed unchanged at HK$40.30 yesterday, it has gained 34 per cent in the past month, outshining rivals. Sino Gold Mining, which recently acquired smaller rival Golden China Resources, yesterday rose 3.93 per cent to end at HK$56.85. Henan-based Lingbao Gold gained 2.61 per cent to HK$5.89 while Fujian-based Zijin Mining Group, which plans to sell A shares in Shanghai later this month, closed unchanged at HK$12.86. Those three stocks have gained up to 17 per cent in the past month. Richard Urwin, head of asset allocation at BlackRock, yesterday said the bull market in commodities had further to go this year and that gold was likely to prove a better bet than oil, given the prospect of falling US rates and further dollar weakness. Last week, Wan Guoli, the vice-secretary general of the China Gold Association, said gold prices would test US$1,000 an ounce over the next few months due to the soft dollar and rising mainland demand.