Analysts Predicting A Major Gold Rally In 2013

March 5, 2013 - PRLog -- Will the U.S. economy make or break commodities? That was the query posed by UBS in a note to investors on Monday, as gold as well as other precious and base metals enjoyed a snappy small recovery. April gold GCJ3 -0.15% was up almost $20 an ounce. Gains had been helped in part by an international equities rally that looked to be taking hold Monday. How high will silver go? Learn more >>  http://www.silverpricestoday.cc/KITCO-SILVER/

And so, the conclusion from UBS? As analyst Julien Garren explains in a note, the function the U.S. economy plays in influencing commodity prices is really a delicate dance, but providing investors may be patient, it is a winner for gold. Part of the sell off for gold last week was blamed on Fed minutes that triggered worries the central bank would wrap up its large asset-buying plan quicker than anticipated. That means holding gold, as an option to the U.S. dollar, seen as susceptible to the Fed’s stimulus policies, is less urgent.

Here’s how Garren expects issues to play out for gold: “A recovery that led to powerful job gains and an unexpected rise in inflation would most likely force the Fed to finish QE, and that could be very bearish for commodities. Nevertheless, given the Fed voters’ extremely dovish bias, we anticipate them to continue printing into 3Q13 when we in commodity strategy, in contrast to our economists, anticipate international growth to shed momentum. That sets up a significant gold rally in Q3,” says Garren. Rare Coins, Silver Coins, Gold Coins, Learn more >> http://www.silverpricestoday.cc/GOLD-COINS/

Straight out U.S. demand for commodities can also be a possible increase for prices, says Garren. The U.S. accounts for 10% of international aluminum and copper demand, but adding in completed goods imports, that total rises to 15%. Last year, he says UBS estimated the U.S. destocked 10% of a year’s demand for all those metals. Maury Harris, chief economist at UBS, is forecasting demand-led restocking in the first half of 2013, which means the U.S. could add about 1.5% to 2% to global demand for metals in the first half, a lot more than the 0.2% that consensus expects.

UBS’s Garren throws in some stock picks for good measure, like buy-rated Rio Tinto RIO +0.14% UK:RIO -2.80% AU:RIO -1.45% , Glencore UK:GLEN -2.72% , Xstrata UK:XTA -3.05% , Ferrexpo uk UK:FXPO -1.71% , Kazakhmys UK:KAZ -4.69% and Freeport FCX -0.22% . He also likes Franco-Nevada, although investors should be aware that the gold “sweet spot” is coming mid-year.

An upbeat word or two from UBS appears well placed on a Monday exactly where it is all go for gold. So throw that in the ring with Citigroup’s bearish call on gold last Friday. Citi went as far as to warn about “hibernation” from gold prices and also slashed ratings on 3 miners. Most analysts and experts agree that buying gold is still a good bet for 2013. How high will silver go? Learn more >>  http://silverpricestoday.cc/KITCO-SILVER/