UBS ups price forecasts for metalsUBS ups price forecasts for base and precious metals
Fri Apr 28, 2006 12:18 PM GMT
LONDON (Reuters) - UBS Investment Bank said on Friday that leading prices for base and precious metals will stay strong through 2007, raising many of its forecasts.
"We now expect most commodities to peak in 2007 rather than this year because of larger than expected fund flows and slow and constantly disappointing supply response," UBS said in its latest quarterly report.
"We do not believe that supply surprises have the potential to see metal prices fall; if anything, we believe there are risks of supply disappointments this year," it said.
Also, there is little concern over risks to demand, as global economic growth remains robust and consumers are seeing brisk offtake, despite high prices.
UBS forecast cash copper rising from an average $5,835 a tonne in 2006 to $5,842 in 2007. Zinc was expected to increase from this year's $3,646 to $4,079 next year. Aluminium was seen at $2,781 this year and $2,811 in 2007.
GOLD SPARKLING
UBS similarly lifted its forecast for gold prices to $630 an ounce in 2006 and $750 in 2007 from $560 and $600 respectively.
"UBS continues to expect the dollar to fall in the medium to longer term and a signal from the U.S. Federal Reserve that it has finished its tightening cycle may be the trigger," it said.
The bank estimated silver prices at $13.4 an ounce in 2006 and $15 in 2007. It saw platinum prices at $1,100 an ounce this year and $1,200 in 2007.
© Reuters 2006. All Rights Reserved.