e Precious metals Preference: neutral : Gold (24 Oct): USD 1,7020z (last month: USD 1,764/oz) | Recommendations UBS View (gold) Gold 6-month target: USD 1,875/oz Tactical (up to 6 months) ; ¢ So far we saw inflows into gold of around 4 million ounces via physically backed ETFs since Bernanke's ° AleugE ee possible Tor gald to test its . . . . all-time high in the next three months, we speech at Jackson Hole. We expect this trend to continue and to lead to an undersupplied market, with are aware that the metal has already financial demand also finding its way into gold futures and physical gold bars and coins. appreciated firmly ahead of the QE3 ¢ Additional demand support comes from central banks, which are likely to further increase their foreign announcement, which requires an ever reserve allocation to the yellow metal. At the same time the drag from India's jewelry demand is set to fade growing amount of investment demand with an already lower base in 2H11 and a stabilizing Indian rupee. to hold the current upward trajectory. e Securing sufficient investment demand to push prices sharply higher is different from securing the Strategic (1 to 2 years) needed demand over a long period of time, and along these lines we see less support for the price overa6- © To protect investors’ portfolios from month perspective. Secondly, from a portfolio perspective we currently prefer to take some risk off the unorthodox monetary policy measures, table instead of on, and we thus maintain our neutral stance on gold. holding gold exposure is a viable and attractive strategy. Alternatively, we A Positive scenario 6-month target: USD 2,250/oz recommend palladium as well as e Unorthodox monetary policy measures by the Fed start to weaken the USD persistently. Moreover, the platinum. Structural supply issues with risk of a Eurozone breakup intensifies, which triggers a tidal wave of investment demand for gold. regard to platinum and a reduction in & Negative scenario 6-month target: