Big Gains Still on Cards for Gold, Oil, Copper: Strategist

Gold, oil and copper prices still have room to increase because of the current turmoil in the Middle East, weak economic data from the United States and strong demand from emerging markets, Michael Widmer, metals strategist at BofA Merrill Lynch Global Research told CNBC.


Widmer has price targets as high as $1,500 for an ounce for gold , $10,200 for a ton of copper and $140 for the barrel of oil .

“Geopolitical uncertainty always has an interesting aspect for people in the market to play gold,” Widmers said, “if you’re looking at the United States … there is a key process of inflation actually bottoming out."

"Gold is still very dynamic despite excessive levels,” Arnaud Scarpaci, fund manager at Agilis Gestion said, bemoaning that the Federal Reserve is quite accommodating. “The rumors of a QE3 (third round of quantitative easing) in June, the sovereign debt fears, and the increasing demand coming from India, and especially China are not helping,” he added. For Agilis, oil could go up to $120 a barrel and even $140 if the situation in Saudi Arabia deteriorated.

“We are forecasting “oil prices at around $140 in the second quarter, seeing a risk of spike up to $200,” Widmer added.

But his outlook for copper is more moderated. “The environment is still positive for copper, but not quite as bullish as it was before,” Widmer said, talking about unexpected tail end risks due to the situation in Japan.

“There could be some ripple effects to the supply chains,” he said.

Widmer said he maintaned his average price forecast of around $10,200 per ton for copper for this year, but added that in the short term the metal's price might come under pressure.