UBS analysts emphasized their bullish view of gold and that it is the most preferred in the global asset, citing its value as a hedge against macroeconomic and geopolitical uncertainty.
UBS maintains a target price for gold at 2700 dollars per ounce by mid-2025
Gold jumped by 23% in 2024 and reached its highest price ever today at the levels of 2889 dollars per ounce, The most important reasons for the rise from UBS's point of view were:
- Lower US yield expectations and diversification of central banks away from the US dollar.
- Gold once again outperformed stocks during times of high volatility, confirming this historical trend.
- It was supported by interest rate cuts by the European Central Bank, although the hill forecast underestimates the size of the Fed's cuts, which served as a resistance to these hikes.
- It also supported inflows to ETFs materially backed by gold, as August recorded the fourth consecutive month of inflows.
- The demand for safe haven.
