Gold
to US$1,300 by 2014: Credit Suisse By Eric Lam - June
24, 2010 – 8:15 am
Credit Suisse has increased its gold price
forecasts by as much as 17% in the next five years, warning
of recurring “waves” of financial unrest in
the coming years that will drive volatility in the precious
metal through repeated stimulus spending.
For 2010, the bank forecasts gold at US$1,145
an ounce, compared with US$1,025 previously, a 12% change.
For 2011, new estimates of US$1,105 are 11% higher compared
with US$1,000 previously, while the 2012 price revision
is up the most to US$1,180, a 17% change.
By 2013, prices are expected to reach US$1,220,
a 12% change, and in 2014, the estimate is for US$1,300,
compared with US$1,120 previously forecast.
Certainly not quite as bullish as some analysts,
such as chief economist David Rosenberg with Gluskin Sheff,
with his prediction for US$3,000 gold in the next few years.
Or, for that matter, Peter Schiff with Euro Pacific Capital
who expects gold to hit US$5,000 to US$10,000 in the next
five to 10 years.
David Davis, research analyst with Credit
Suisse, said the short-term gold price is being influenced
by the current macroeconomic and foreign exchange markets.
“We believe that this influence will
dissolve in the short term but is likely to reappear in
waves, and as such we can expect some volatility in the
gold price,” he said in the report. “Our global
equity strategy team believes their is an 80% chance of
a renewal of quantitative easing either owing to the sovereign
credit crisis or a double dip occurring in which case the
current macro environment will likely reappear.”
The long-term price for gold remains at
US$850, although price trends are moving upwards as mine
supply runs out, he said.
Credit Suisse has also revised its methodology
for price targets and valuations of gold companies, and
as a result has upgraded Barrick Gold, Agnico Eagle and
Eldorado Gold all to Outperform with price targets of $54,
$76 and $22 respectively.