UBS (NYSE:UBS) Likes Newmont (NYSE:NEM), Barrick (NYSE:ABX)

UBS (NYSE:UBS) via UBS Investment Research, said they like the overall mining and metals sector, and within the gold segment, Newmont Mining (NYSE:NEM) and Barrick Gold (NYSE:ABX) are their top picks.

UBS analysts cited these as the reasons for their positive outlook on gold:

"We believe that ongoing pressure on sovereign debt markets, combined with persistent concerns over private sector credit contraction will raise the spectre of debt monetization repeatedly over the next few years," the analysts advised. "We expect that this background will remain very supportive for gold prices over the period, and that informs our above consensus gold price outlook and our inclusion of two gold stocks in our top ten picks..."

"The fear of further debasement of fiat currencies follows closely. And in turn we expect the fear trade-very apparent through heightened physical demand for small bars and coins and rising ETF creations-will escalate in H2 2010 and into 2011."

UBS has also increased their estimates of gold prices, saying they're looking for an average of $1,205 an ounce in 2010, and in 2011 it'll pick up to $1,250 to $1,295 an ounce on average.