According to UBS Investment Research, investors should make a point to purchase mining stocks and metals during this period, but do it slowly. Analysts recommend the purchase of commodities like gold, zinc, copper, and coal. In terms of equities, Rio Tinto and BHP Billiton are two of the mining companies that top their list.
UBS Analysts feel that the economic climate will support high gold prices during the next few years. They believe that the devaluation of European currencies will mainly be responsible for this increase. The expectation is that new gold-based ETFs will be created and investors will buy gold coins and small bars of gold well into 2011.
These professionals also predict that many central banks will purchase gold during the remainder of this year. They believe these entities will be buyers, rather than major sellers, of the precious metal. In addition, new and current investors are expected to diversify some of their gold portfolios into physical gold. The company estimates that gold prices will average $1205 per ounce during the rest of 2010. This is an increase from the $1129 per ounce that UBS previously forecasted. Over the long term, the company raised its gold price estimates a respectable 13 percent.
According to UBS analysts, silver should not be underestimated and it will assume a role as the “poor man’s gold,” serving as an inexpensive alternative safe-haven asset. UBS increased its 2010 silver price forecast from $17.74 to $18.32 per ounce and made a 2011 estimate of $19.50 per ounce. It also increased its long term real and nominal silver price forecasts by five to six percent.
Investors who heed this advice will begin to buy gold coins and other physical forms of the precious metal. However, they will do it slowly, using the market fluctuations to maximize the amount of reward for investment risk. UBS also made positive forecasts for other commodities, including platinum, palladium, copper, coal, and zinc. Those who are interested in diversifying their portfolio should consider placing money in these.
Source:
Kosich, Dorothy. Mineweb.com. Time to Accumulate metals and mining stocks-UBS.