Barrick Gold: Lower Gold Prices, Lower Price Target, UBS Says

Gold miners are getting hit today, but Barrick Gold (ABX) has bucked the selling despite having its price target lowered by UBS today.

AP

UBS analysts Brian MacArthur and Joshua Wardell explain why they lowered Barrick Gold’s price target to $18.50 from $21.75:

UBS’s precious metals analyst, Edel Tully, believes the gold price push of late has largely arisen from short-covering, rather than the emergence of new buyers. Compounding the difficulties facing the gold demand environment, UBS economists believe the Fed ‘will not alter their tilt toward tapering nor interrupt their debate about when to tighten and how quickly’ given the emergence of encouraging U.S economic data points. Together, Edel Tully believes this lack of fresh demand coupled with the improving U.S economy will result in gold remaining in a range-bound state. UBS forecasts gold prices declining from $1,300/oz to $1,200/oz in 2015.

Shares of Barrick Gold have gained 0.4% to $16.81 today, despite the fact that the Market Vectors Gold Miners ETF (GDX) has dropped 0.7% to $23.87 and big miners Newmont Mining (NEM) and Goldcorp (GG) have fallen 0.1% and 0.3%, respectively.