JP Morgan has increased its gold price forecast for next year by nearly $100 per ounce on the back of subprime pressures that were pushing gold upward.

The financial group increased its forecast for next year to $814 per ounce from $716 while raising its 2009 outlook to $767 from $698.

The change in outlook came as the group claimed that mining of the metal faced considerable challenges, meaning that what was produced would still have a high premium, especially in light of other factors pressing for a higher gold price.

A research note said: "With the impact of the sub-prime issue in the U.S. continuing to unfold, gold's safe haven status has once again come to the fore.

"Looking out to next year, we expect strong demand from India, China and the Middle East to remain positive for gold.";

JP Morgan said that investors had flocked to buy gold since August as jewelry demand had added to strong crude prices and the constraints in the mining supply.