FinancialAdvisor's College Class (FACC)

[FinancialAdvisor]

This Time It Is Merrills To Increase Gold Price Forecasts

*Still... check out how low these numbers are... $GOLD still gets no respect!!!>>>

This Time It Is Merrills To Increase Gold Price Forecasts
December 09 2005 - Australasian Investment Review – (AIR)

They’re not exactly the first, but it’s unlikely they will be the last instead: Merrill Lynch has upgraded its gold price forecasts. In a note to clients this morning, the broker reports the higher forecasts are the result of a combination of positive supply-demand fundamentals in the gold market, potential inflationary pressures in the US, and its own inhouse view that the US dollar will weaken from here on.

The broker has upgraded forecast average gold prices from US$455/oz to US$485/oz in Q4 2005, from US$441/oz to US$525/oz in calendar 2006, from US$425/oz to US$500/oz in 2007 and from US$400/oz to US$475/oz in 2008. (Mind the gradual decline post 2006).

The long term price estimate remains at US$400/oz.

The net effect of the changes made is higher forecast earnings and NPVs for all gold stocks under coverage. The broker highlights that companies in Australia that benefit the most are Lihir (LHG), Oxiana (OXR) and Kingsgate (KCN).

From an investment perspective, the broker prefers the pure play leveraged gold stocks, which are the three mentioned above plus Victoria’s Perseverance (PSV). These are all rated Buy.


LINK: http://www.aireview.com/index.php?act=view&catid=8&id=3244