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Warburg ups gold price forecast
15/05/2002 11:15 - (SA)
London - UBS Warburg upgraded its average gold price forecast for 2002 on Wednesday to $305 an ounce from $296 an ounce previously.
"Gold has performed strongly in 2002, driven by reductions of the gold miners' hedge-books, and a welcome return of investment demand to the gold market," said UBS Warburg analyst John Reade.
Warburg also increased its 2003 forecasts by 6% to $320/oz from $302/oz previously. Its long-term forecast was raised from $300/oz to $325/oz.
Gold has rallied to its highest level in more than two years this month. It was last trading at $307.20/307.70 an ounce.
UBS Warburg expected gold to trade between $290 and $335 an ounce for the remainder of 2002.
"In 2002 the performance of the gold price has surpassed our already-positive forecasts," Reade said.
Reade said that cuts in forward sales by mining companies, or hedge reductions, would reach an aggregate of 500 tons this year. UBS Warburg had originally forecast that hedge cuts would total 250 tons.
Japanese investment demand was also fanning gold higher, backed by widespread purchases in North America and Europe, UBS Warburg said.
- Reuters
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