TD Lowers Gold, Silver Targets but Remains “Firmly Bullish”

“The escalating European debt crisis, the upcoming replay of the U.S. debt ceiling debacle and the pending ‘fiscal cliff’ in the U.S leaves us firmly bullish on gold. That being said, and as we have seen over the past few years, increased global risks have lead to a ‘flight-to-the-dollar’ at the expense of equities, commodities, and gold. The U.S. dollar index is trading at its highest level since the summer of 2010 and the US 10-year treasury yield yesterday hit a 60-year low of 1.61%. In our view, the market is signaling deflationary pressures ahead.”

The above commentary is from a report published this morning by analysts at TD Securities, which reduced its gold and silver price forecasts as follows:

Gold

2012 – to $1,648 from $1,700

2013 – to $1,750 from $1,800

Silver

2012 – to $30.67 from $35.00

2013 – to $34.00 from $36.00

TD Securities also cut its price targets on a number of gold stocks to reflect its lower forecast on the metals, including:

Barrick Gold (ABX) – to $53.00 from $58.00, but Buy rating reiterated

Goldcorp (GG) – to $52.00 from $62.00, but Buy rating reiterated

Newmont Mining (NEM) – to $60.00 from $65.00, but Hold rating maintained

Kinross Gold (KGC) – to $10.00 from $10.50, but Hold rating maintained

Agnico-Eagle Mines (AEM) – to $42.00 from $44.00, but Hold rating maintained

In spite of its more cautious short-term outlook, the firm reiterated its longer-term positive stance on the precious metals.  ”A strong dollar could persist in the near term but, ultimately, we believe that central banks are likely to respond at some point with additional monetary stimulus – particularly if the Eurozone continues to deteriorate.”