UBS says gold price will pass US$2,000
By Chen Li |
August 25, 2011, Thursday
|
Print Edition
Print Edition
SWISS investment bank UBS yesterday again raised its forecast for short-term gold trading to a range of US$1,724 to US$2,200 an ounce due to economic woes and growing sovereign debt concerns.
The bank's forecast is higher for the second time this year and remains bullish it foresees "more turbulent times ahead," it said yesterday.
Underpinning views that developed nations are still far from solving the sovereign debt crisis, it also lifted the 12-month forecast to US$2,200 an ounce from US$1,800.
UBS analyst Dominic Schnider and strategist Giovanni Staunovo said in a note: "Global growth is at risk of slowing sharply, with fears of a contraction in the developed world in the short run."
Their note said it anticipated that at a symposium tomorrow, US Federal Reserve chairman Ben Bernanke could signal further monetary policy stimuli, while the European Central Bank continues to buy government bonds to prevent the European debt crisis spreading.
The note added: "With the euro at risk, interest rates in the eurozone and the US should remain steady, real interest rates will remain in negative territory and gold should continue to be in high demand."
Indirect support for gold is coming from the Swiss and Japanese authorities. The two countries' unwillingness to see a further appreciation of their currencies is limiting safe-haven investments.
The note said: "This channeling of safe-haven money into gold could also receive support from investors looking to invest in gold's relative outperformance."
The bank's forecast is higher for the second time this year and remains bullish it foresees "more turbulent times ahead," it said yesterday.
Underpinning views that developed nations are still far from solving the sovereign debt crisis, it also lifted the 12-month forecast to US$2,200 an ounce from US$1,800.
UBS analyst Dominic Schnider and strategist Giovanni Staunovo said in a note: "Global growth is at risk of slowing sharply, with fears of a contraction in the developed world in the short run."
Their note said it anticipated that at a symposium tomorrow, US Federal Reserve chairman Ben Bernanke could signal further monetary policy stimuli, while the European Central Bank continues to buy government bonds to prevent the European debt crisis spreading.
The note added: "With the euro at risk, interest rates in the eurozone and the US should remain steady, real interest rates will remain in negative territory and gold should continue to be in high demand."
Indirect support for gold is coming from the Swiss and Japanese authorities. The two countries' unwillingness to see a further appreciation of their currencies is limiting safe-haven investments.
The note said: "This channeling of safe-haven money into gold could also receive support from investors looking to invest in gold's relative outperformance."
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