UBS Analyst Raises Gold Stocks' Price Targets on Higher Gold Price Forecasts

Despite expectations that prices for both gold and silver will be lower in 2009 than they are this year, UBS has upgraded its forecasts for several metals through 2010.

The Swiss financial services firm now expects gold will average $895, $800 and $730 per ounce in 2008, 2009 and 2010, up from $850, $750 and US$720, respectively. Its palladium forecasts climb 24% to $460, 96% to $550 and 81% to $625 per ounce for those years.

UBS feels a firming of the U.S. dollar, inflation fears subsiding in developed markets and risk in general being lower in 2009 will all contribute to lower price for gold and silver.

As a result of its new projections, earnings per share estimates for precious metals stocks in its coverage universe climb 16%, 22% and 8% from 2008 to 2010. This produces average price target increases of 8%, but Agnico-Eagle Mines Ltd. (AEM) and Kinross Gold Corp. (KGC) have been downgraded to “neutral” from “buy” due to their share price gains. However, their target prices rise to $85 from $78 per share and to $26 from $24, respectively.

The following names continue to be rated “buy” at UBS and each have higher price targets: Barrick Gold Corp. (ABX) ($57), Centerra Gold Inc. (CAGDF.PK) (C$10.50), Franco-Nevada Corp. [FNV.TO](C$26.50), Goldcorp Inc. (GG)($53.50), Newmont Mining Corp. (NEM)($64) and Silver Wheaton Corp. (SLW)(C$18.50).

Comments

[montyman:]

UBS is rating gold? Shouldn't gold be rating UBS? he he he

2008 Jul 06 08:55 AM

[vati01776:]

Seems like most of the sell side, unlike the majority of gold gurus, doesn't buy into the notion of higher gold prices. The compounded guesswork on gold prices and stock target prices looks like it's merely contrived to provoke turnover -- i.e., generate commissions.

2008 Jul 06 08:58 AM

[CaptBob:]

Let's see: Housing debacle has about 3 years to wring out---
Banks all lined up cliff side in a suicide pact---
Fiat dollar presses running non-stop--------
Oil headed for $200 with 0 alternatives-----
Market and Economy both in crash mode-----
Fed jammed in a corner of it's own painting, can't lower or raise----

BUT!! "Gold is going to come down"!!!--no wonder no-one put his name on that one!!!Did it beam in from the third ring of Saturn???

NOT IN MY UNIVERSE!!!!!

2008 Jul 06 11:06 AM

[GMiki1:]

From the geniuses who brought you the financial crisis... Okay, that's easy to say. It's really only the geniuses who tipped the scale.

Gold will be much higher in 2009, 2010, and thereafter. Simply a bankable fact. Of course most of Wall Street doesn't want you to recognize that. They want you to lose more money in the markets. If you're not in gold, energy, and/or commodities, you have lost money, haven't you?

2008 Jul 06 11:47 AM

[fireball:]

when i was a younger man gold was much cheaper as was silver. every one said buy stock so i kept buying physical gold and silver. i got most of my gold between 260 and 300 per ounce and most of my silver between 4 and 6. everyone said it is illiquid. i just kept socking it away in a safety deposit box which i had to have anyway for deeds and such. i kept answering it is insurance not an investment. i see nothing wrong with gold or silver stocks or mining stocks but if things come unraveled they will be about as useful as the other pieces of paper we use for exchange. i hope i never need my insurance. it would be a bleak situation to cause me to use it? so is it crazy to want a stable metal backed currency. my faith in government was gone decades ago and i sense that the productive u.s. citizens are coming to this more every day. a sound currency is one of the few legitamate functions of the federalis.

2008 Jul 06 12:12 PM

[User 30121:]

Oh yes, UBS is right on target....and of course what they forgot to include in this piece is that there won't be ANY hurricanes or tornadoes in 2008, 2009, and 2010 either....those crazy sonofabitches. If that prognostication in itself isn't enough to make you RUN--not walk--to your nearest bullion dealer and clean him out of every piece of gold and silver, nothing EVER will!

2008 Jul 06 01:54 PM

[Ant1967:]

Amen I say.

2008 Jul 06 06:14 PM

[CT Programmer:]

This week, the dollar rallies and gold sinks. Next week, the dollar slips and gold rallies. And each week you can hear the arguments for either side flip-flop back and forth. My belief is you can dig up an analyst that says just about anything.

The long-term trend is that our Fed is going to sit on its hands leaving rates where they are for a good while --- maybe start raising them a little. They may talk the inflation-control talk, but they don't walk it. They're still too worried about growth and liquidity. Meanwhile, countries across the world have been dealing with double-digit inflation and high growth that is going way too fast, and if they themselves don't do enough to suppress growth by raising rates (and not just by 1 point, but by 3-6 points), commodity prices will do it for them. Plus, the ECB is already raising rates. So you've got the rest of the world putting the brakes on and raising rates, commodities driving up the price of everything, and the US holding rates steady and running the presses full speed. You tell me what that will do to inflation in this country? Still think gold is going to come down? These are long-term trends that take years to play out, not day-by-day analyst whims.

Also, why on earth would "fireball" think that gold would have any kind of use or value whatsoever if governments and all of civilization comes crashing down? I'd stock up on canned goods, water and bullets before I stocked up on gold for an Armageddon scenario. Gold has value in a market, but not in a society where the market collapses. Gold, like diamonds, in itself is nothing but a luxury good. You can't eat your gold. But, assuming that society holds for now and you can cash in, I'd say you've got a nice retirement plan going. ;-)

2008 Jul 07 10:51 AM

[CT Programmer:]

This week, the dollar rallies and gold sinks. Next week, the dollar slips and gold rallies. And each week you can hear the arguments for either side flip-flop back and forth. My belief is you can dig up an analyst that says just about anything.

The long-term trend is that our Fed is going to sit on its hands leaving rates where they are for a good while --- maybe start raising them a little. They may talk the inflation-control talk, but they don't walk it. They're still too worried about growth and liquidity. Meanwhile, countries across the world have been dealing with double-digit inflation and high growth that is going way too fast, and if they themselves don't do enough to suppress growth by raising rates (and not just by 1 point, but by 3-6 points), commodity prices will do it for them. Plus, the ECB is already raising rates. So you've got the rest of the world putting the brakes on and raising rates, commodities driving up the price of everything, and the US holding rates steady and running the presses full speed. You tell me what that will do to inflation in this country? Still think gold is going to come down? These are long-term trends that take years to play out, not day-by-day analyst whims.

Also, why on earth would "fireball" think that gold would have any kind of use or value whatsoever if governments and all of civilization comes crashing down? I'd stock up on canned goods, water and bullets before I stocked up on gold for an Armageddon scenario. Gold has value in a market, but not in a society where the market collapses. Gold, like diamonds, in itself is nothing but a luxury good. You can't eat your gold. But, assuming that society holds for now and you can cash in, I'd say you've got a nice retirement plan going. ;-)

2008 Jul 07 10:51 AM

[CT Programmer:]

This week, the dollar rallies and gold sinks. Next week, the dollar slips and gold rallies. And each week you can hear the arguments for either side flip-flop back and forth. My belief is you can dig up an analyst that says just about anything.

The long-term trend is that our Fed is going to sit on its hands leaving rates where they are for a good while --- maybe start raising them a little. They may talk the inflation-control talk, but they don't walk it. They're still too worried about growth and liquidity. Meanwhile, countries across the world have been dealing with double-digit inflation and high growth that is going way too fast, and if they themselves don't do enough to suppress growth by raising rates (and not just by 1 point, but by 3-6 points), commodity prices will do it for them. Plus, the ECB is already raising rates. So you've got the rest of the world putting the brakes on and raising rates, commodities driving up the price of everything, and the US holding rates steady and running the presses full speed. You tell me what that will do to inflation in this country? Still think gold is going to come down? These are long-term trends that take years to play out, not day-by-day analyst whims.

Also, why on earth would "fireball" think that gold would have any kind of use or value whatsoever if governments and all of civilization comes crashing down? I'd stock up on canned goods, water and bullets before I stocked up on gold for an Armageddon scenario. Gold has value in a market, but not in a society where the market collapses. Gold, like diamonds, in itself is nothing but a luxury good. You can't eat your gold. But, assuming that society holds for now and you can cash in, I'd say you've got a nice retirement plan going. ;-)

2008 Jul 07 10:53 AM

[CT Programmer:]

This week, the dollar rallies and gold sinks. Next week, the dollar slips and gold rallies. And each week you can hear the arguments for either side flip-flop back and forth. My belief is you can dig up an analyst that says just about anything.

The long-term trend is that our Fed is going to sit on its hands leaving rates where they are for a good while --- maybe start raising them a little. They may talk the inflation-control talk, but they don't walk it. They're still too worried about growth and liquidity. Meanwhile, countries across the world have been dealing with double-digit inflation and high growth that is going way too fast, and if they themselves don't do enough to suppress growth by raising rates (and not just by 1 point, but by 3-6 points), commodity prices will do it for them. Plus, the ECB is already raising rates. So you've got the rest of the world putting the brakes on and raising rates, commodities driving up the price of everything, and the US holding rates steady and running the presses full speed. You tell me what that will do to inflation in this country? Still think gold is going to come down? These are long-term trends that take years to play out, not day-by-day analyst whims.

Also, why on earth would "fireball" think that gold would have any kind of use or value whatsoever if governments and all of civilization comes crashing down? I'd stock up on canned goods, water and bullets before I stocked up on gold for an Armageddon scenario. Gold has value in a market, but not in a society where the market collapses. Gold, like diamonds, in itself is nothing but a luxury good. You can't eat your gold. But, assuming that society holds for now and you can cash in, I'd say you've got a nice retirement plan going. ;-)

2008 Jul 07 10:58 AM

[daavka:]

i dont know what protsess of SLW price. help me. please

2008 Dec 22 09:24 AM