UBS Raises One Month Gold Forecast To $1700
August 3, 2012
By James O'Dell
August 3, 2012, Los Angeles – The Gold price has bounced on Friday, and at the time of this writing is trading at $1,595.20 an ounce after easing 0.76 percent or $12.10, to close at $1,587.60 an ounce on Thursday, after the European Central Bank (ECB) failed to deliver on investor expectations after ECB President Mario Draghi pledged to do everything it takes to preserve the single currency. The Silver price dipped 1.06 percent or $0.29 to close at $27.10 an ounce, while the Gold/Silver ratio, the number of ounces of Silver it takes to buy one ounce of Gold, climbed to 58.58, as Silver under-performed Gold.
Zurich based Union Bank of Switzerland (UBS), announced on Thursday that it is raising its one month Gold forecast from $1,550 to $1,700 an ounce and its three month forecast from $1,600 to $1,750 an ounce, on the expectation that the Fed will soon be launching additional monetary stimulus. Edel Tully, strategist for UBS explained that, “our one-month target coincides with the Fed’s Jackson Hole symposium at the end of August, which we think will be significant for policy expectations ahead of the September FOMC meeting.”
Investors are still reeling after inaction from both the Fed and the ECB, while the price of Gold remains just shy of the $1,600 an ounce level as it displays an amazing resilience. Meanwhile, in the euro zone, the ECB is said to be moving closer to a bond buying program that some say could end up printing money. With details of the program still sketchy, Draghi remained elusive on full details of the plan that is being resisted by Germany’s Bundesbank. Draghi said details would be fleshed out in coming weeks as he consults with other governments.
“It is clear and it is known that Mr. Weidmann and the Bundesbank have their reservations about programs that buy bonds,” said Draghi. “It does seem that the ECB is inching closer towards pushing the button on some version of QE, though details are still somewhat hazy,” said Craig Veysey, of Principal Investment Management Ltd. Don't leave your assets unprotected during these times of economic and geopolitical uncertainty, invest in physical Gold and Silver bullion and protect your wealth.
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