Commodities overview Commodities - Key points Preferences (6 months) e The impact of new quantitative easing (QE) measures on commodity prices is losing strength, as broadly uadesmetaht — avconstalse diversified commodity indices have not been advancing anymore on a month-on-month basis. Investors have started to reflect on the underlying economic challenges that motivated the easing decisions by Commodities key central banks. With global economic growth barely accelerating, the asset class will struggle to total appreciate firmly over the coming months. We therefore advise investors to have only low single digit return expectations for commodities warranting a neutral stance. Precious e Gold is less depending on economic growth, however the metal could be a beneficiary of ample Metals liquidity provided by central banks. But ebbing QE news flow at a later stage (6-12 months) might challenge the necessary investment demand inflows to balance the market. Hence, we stay neutral Every on precious metals. e The return outlook of the energy sector remains not compelling in 4Q12 and we stay neutral. Global crude oil supply should expand firmly and surpass incremental demand in 4Q12. We think this will bring Base Metals Brent crude oil prices temporarily towards USD 95/bbI while WTI should slide towards USD 78/bbl in 4Q12. However, a weaker USD due to QE3, ongoing social turmoil in the Middle East and North Africa and the risk that Iranian tensions have the potential to heat up after the US presidential elections are Agricultural likely to keep the oil price at around USD 105-110/bbl in 6 months. In addition, demand growth from EM countries in 1Q13 could start to gather pace. e Base metal prices should hold their ground, with China's growth deceleration coming to an end. So mnew ond we keep our neutral stance. That said, it is too early to call for a strong extension of the liquidity source: UBS CIO WM Global Investment Off driven price rally seen until now, despite the RM