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Swiss Banks Raise 2013 Precious Metals Price Targets

Release Date: 
Friday, October 12, 2012

Gold was thinly traded, down $1.90 at 7:58 a.m. Pacific Time on the New York Spot Market, trading at $1,766.30 per ounce.  Spot silver was $.20 lower, trading at $33.90 per ounce.  (Click here for the most current spot prices.)

Swiss banks UBS and Credit Suisse have increased their average price targets for precious metals in 2013.  UBS raised its target for the average gold price in 2013 to $1,900 per ounce.  “The open-ended nature of QE … promises longevity for a higher gold trade and the quantitative easing and strength in gold also supports silver,” the bank noted.

Credit Suisse also raised its gold and silver forecasts for 2013.  The average gold price in 2013 may rise to $1,840 per ounce a 7% increase.  Analysts raised the bank’s average 2013 price target for silver by 13% to $33.10 per ounce.

"The Fed is not finished: QE 3.5 is likely, possibly as soon as December in the form of on-going purchases of treasuries after Operation Twist expires,” Credit Suisse analysts said.  “The Federal Reserve appears prepared to accept the political risks of further balance sheet expansion [and] on that basis, it seems probable that real yields can fall further into negative territory, which should be positive for gold," the analysts said, noting that "a move back in to the $1,830 per ounce area would simply place [gold] back on the long term trend."

According to Credit Suisse, the gold market will be highly attuned to any hint that one or more of the major ratings agencies might cut the U.S. credit rating if Congress fails to sufficiently address the fiscal cliff at the end of 2012.  While Credit Suisse economists believe deals will be done to avoid the most severe effects of expiring tax rebates and automatic spending cuts, "those deals may well be temporary and deep structural issues will remain unresolved," the bank said.

(Sources:  “UBS raises gold, silver, copper forecasts,” Mineweb, October 12, 2012; “PRECIOUS METALS: Gold Slips in Light Trade; Platinum Falls,” Wall Street Journal, October 12, 2012; “Credit Suisse lifts '13 gold view 7% to $1,840-oz.,” Marketwatch, October 12, 2012)

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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