UBS sees lower gold prices, lower share prices for Barrick

Barrick Gold (ABX +0.8%) is higher despite UBS' move to lower its target price for the shares to $18.50 from $21.75, citing a lack of fresh demand for gold coupled with the improving U.S economy that will result in gold remaining in a range-bound state.

UBS thinks the recent gold price push has arisen mostly from short-covering rather than the emergence of new buyers, and believes the Fed "will not alter their tilt toward tapering nor interrupt their debate about when to tighten and how quickly" given the emergence of encouraging U.S. economic data points.

The firms forecasts gold prices declining from $1,300/oz. to $1,200/oz. in 2015.

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Comments (8)
  • techy46
    , contributor
    Comments (11499) | Send Message
    ABX is working on petting cost of gold in the $800-900 range and with a annual production around 6 million ounces at a price of $1200-1300 ABX can realize $1.8-2.4 billion in profits. At 1.16 billion shares and a PE of 12 that would put ABX around $20 PS.
    13 Jun 2014, 02:28 PM Reply Like
  • Brian58
    , contributor
    Comments (298) | Send Message
    another orchestrated downgrade. Show me an audit of COMEX and then we can forecast the price. COMEX will default this year IMO
    13 Jun 2014, 02:31 PM Reply Like
  • penciltucky1
    , contributor
    Comments (10) | Send Message
    More of the same. UBS joins the bandwagon of fools!
    13 Jun 2014, 02:42 PM Reply Like
  • maltajon
    , contributor
    Comments (20) | Send Message
    I don't know why SA gives space to any major Bank or Broker.They all have their own agenda, and consistently lie through their teeth.Did I not read recently that the major Banks were buying gold? Maybe they realise that India and China are accumulating because they know what will be the next move in realigning the world's Financial system?
    UBS et al are bearish because they want to pick up Gold on the cheap from the ill informed Retail market. The mugs always sell at the bottom and buy near the top.
    13 Jun 2014, 02:53 PM Reply Like
  • leupold14
    , contributor
    Comments (38) | Send Message
    UBS is also forecasting 3.0% GDP growth for 2014 and a 3.2% yield on the 10 yr!


    Like every other large, bloated bank, these forecasts are produced by 20 something quants deep within the bowels of the organization. Plagued by recency bias and an over-dependence on hyper-complex models, the kids who put these estimates together aspire for the accuracy of a coin flip, but often fall short.
    13 Jun 2014, 02:59 PM Reply Like
  • penciltucky1
    , contributor
    Comments (10) | Send Message
    Well said Malta!
    13 Jun 2014, 03:01 PM Reply Like
  • Shareholder21
    , contributor
    Comments (6) | Send Message
    This is all so very simple to understand. Governments all around the world have been racing to devalue their currencies via the printing press. Eventually creditors will demand repayment in a form that cannot be printed. UBS wants to fill their vaults with cheap gold now and avoid the mad rush that will surely occur later.
    14 Jun 2014, 12:35 AM Reply Like
  • User 244626
    , contributor
    Comment (1) | Send Message
    With all the gloomy price projections for gold, why would there be such a sudden rush of short covering now? Oh, they "think" that's what it is... so therefore, quite naturally following that bit of unfounded logic, they conclude that there's no interest in new gold buying.
    14 Jun 2014, 09:10 AM Reply Like
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