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Monday, July 26, 2010

UBS (NYSE:UBS), CIBC World Markets, TD Securities Increase Gold Estimates

Last week, investment banks UBS (NYSE:UBS), CIBC World Markets and TD Securities all increased their outlook on gold prices, will all of them looking for around $1,300 an ounce or more going forward.

UBS was the last of the three during the week to upwardly revise their numbers, increasing their outlook from $1,129 an ounce to $1,205 an ounce for 2010, and up to $1,295 an ounce, from $1,250 an ounce in 2011.

The dubious stress tests and their results didn't impress UBS, as it didn't many others, as the bank noted that "ongoing pressure on sovereign debt markets, combined with persistent concern over private sector credit contraction will raise the specter of debt monetization repeatedly over the next few years.”

TD Securities increased their gold price estimates in 2011 from $1,100 to $1,300, and from $1,000 to $1,400 in 2012. They also cited global economic uncertainties as the impetus behind their changes in viewpoint concerning gold.

For CIBC World Markets, their changes were the largest, increasing their outlook in 2012 to $1,500 an ounce. Over the long term, they see gold leveling at from $1,000 to $1,200 an ounce.

The fall season is historically a big mover for gold prices, and with prices continuing to find support a slightly below $1,200 an ounce, gold could make a big move starting in September.

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