Gold News

Gold Price at $1500 by Year-End, Says UBS

ECONOMISTS at Swiss banking giant UBS forecast the Gold Price will hit $1500 an ounce this year as Europe's financial crisis worsens.

"The price of gold has yet further to rise," reckons Dirk Faltin, writing in a monthly report for UBS that's quoted by Bloomberg.

"Any sharp intensification of the sovereign-debt crisis in Europe could propel the Gold Price even higher, but downside risks should not be discarded lightly either."

Advising UBS clients to buy "unhedged, physically-backed positions over equities and paper investments in gold," the report recommends buying any dip below $1200.

"The Gold Price is gaining after every drop," agrees Pradeep Unni, senior financial analyst at Richcomm Global Services in Dubai, speaking to Reuters.

"It's steadily trading near its all-time high. Investment demand is very strong for the yellow metal."

Looking further ahead, "There are a lot of people who take a longer term view," says commodities analyst Walter de Wet at South Africa's Standard Bank.

"Interest rates are low, so for the next six to 12 months, conditions still favor higher Gold Prices irrespectively of equity markets rallying."

A separate UBS economics note agreed today, saying that "rising interest rates in the United States, in the absence of rising inflation or indeed expectations, would not have been gold supportive. [But] our forecast for a looser monetary policy environment provides a positive backdrop to gold over the coming months."

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