UBS: Gold, Silver Prices to Witness Dramatic Surge

SEATTLE (Scrap Monster): UBS- the leading multinational investment bank and financial services company, in its latest prediction, noted that both gold and silver are likely to witness dramatic price jumps.

The bullish outlook on the precious metals are mainly on the back of anticipations of the U.S. Federal Reserve starting to cut interest rates in the near future. The market continues to maintain a close watch on the moves by the U.S. Fed Reserve, which will result in a major price boost for both gold and silver.

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According to Joni Teves, precious metals strategist at UBS, the bank expects that a potential Fed easing could push gold prices to higher levels. The expected lower rates will turn out to be bullish for gold.

The weak dollar scenario too will lend support to the price surge. The lower interest rates generally results in weak U.S. dollar, which in turn will make gold more affordable to international buyers, thus stimulating demand, Teves added.

Although gold looks to be the cleanest play right now, other precious metals including silver could follow suit. An upmove in gold could benefit silver and platinum the most, as these two have been lagging behind in price action during much of the previous year.

In a recent interview, Ms. Teves had predicted that gold prices are likely to touch around $2,200 per ounce by the end of the current year.