UBS expects gold price to rise to $1,400

The Swiss bank UBS expects an increase in the number of Gold price up to $1,400 per troy ounce. The bank is positive on the precious metal due to the ongoing trade conflict between the United States and China and the expectation that the Federal Reserve will not raise interest rates again this year. The bank also expects the dollar to come under pressure this year due to rising inflation.

The Gold price reached its highest level in nearly a year in February, helped by stock market turmoil. But the stock market recovered quickly after that, putting pressure on the price again. The price has hovered around $1,300 per troy ounce since then. According to UBS analysts Wayne Gordon and Giovanni Staunovo, the price will resume the uptrend later this year. They expect an increase to $1,350 per troy ounce within three to six months and an increase to $1,400 per troy ounce within twelve months.

UBS analysts see gold as a valuable insurance in a well-diversified portfolio because the precious metal is known as a safe haven and because it can lower the volatility of the portfolio as a whole. From the report:

"Central bank purchases and higher ETF inflows boosted demand for gold in the first quarter, while supply remained broadly stable, according to the World Gold Council. Low volatility in the stock market and a strong dollar in April undermined this dynamic. At least until Donald Trump's threats brought up gold's safe-haven status. We would like to remind investors that adding gold to a growth portfolio can help reduce volatility. We see the price of gold rising to $1,400 per troy ounce in twelve months."

Gold price to $1,400

Not only UBS is positive about gold, but also the Canadian Scotiabank believes that this is an interesting time to buy gold. Under the current market conditions, the bank believes it is important to hedge risks. According to analyst Nicky Shiels, this could be the year that the gold price manages to break out of its narrow range. break. She had this to say about it:

"We feel like we're in a good position for a new commodity cycle. Gold is reviving a bit this year and is trying to break out of its four-year cycle. It is generally seen as a hedge against the dollar, but also as a hedge against inflationary policies and geopolitical risk. I think gold has a chance to hit $1,400 this year."

According to Shiels, in this time of uncertainty, there is more reason to reduce risks. On the one hand, there is uncertainty about the monetary policy of central banks and, on the other hand, there are also ongoing (geo)political tensions. Under these circumstances, gold is an interesting safe haven, because it has no counterparty risk.

Development of gold prices over the past twelve months

Disclaimer: Holland Gold does not provide investment advice and this article should not be considered as such. Past performance is no guarantee of future results.