NEW ANALYSIS from Swiss investment and bullion bank UBS's commodities team recommends Buying Gold now, before "a decisive policy response" to the financial crisis leads other investors to do the same.
Advising caution on the broader commodities and mining space, "We anticipate another leg-down in commodities and mining stocks before sufficient stress emerges to force" policy-makers to act, says UBS. Over the next 3-6 months, the bank therefore advises Buying Gold – and also buying "high quality" Gold Mining stocks – whilst also selling copper.
"Clearly, Buying Gold early into a downturn carries greater risks and will be volatile," UBS's commodities team warns. "Consequently, we advise investors [also] hold a short or underweight copper and copper equity position against it."
Strong policy action to try and resolve the financial crisis is then likely to stimulate demand for industrial commodities. "We believe that investors will Buy Gold and gold equities early this cycle," says UBS.
London stock-broker Numis also said this week it is "bullish on gold" and also because it expects more quantitative easing from major central banks shortly.
Despite cutting the brokerage's commodity price-forecasts by 6%, analyst Andy Davidson continues to recommend Buying Gold alongside a list of preferred gold-mining stocks, reports CityWire. Industrial commodities, in contrast, "are in a significant state of over-supply," he warns.
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