Banks and other financial institutions have been bullish on precious metals this year. UBS is still convinced gold is the safest bet, especially with the US elections coming up. Hedging against financial uncertainty remains advised at any time.
UBS Remains Bullish on Gold
It is interesting to see a bank’s division remain bullish on precious metals. After all, investing in gold can be done in different ways, and doesn’t necessarily generate profit for the bank in question. Even so, there are many factors at play that can influence the economy, either for better or worse.
First of all, there is the COVID-19 pandemic. Despite best efforts, things are not looking too great in Europe and South America. Even the US isn’t out of the woods yet, as its rate of infections remains relatively high. For this reason alone, it is advised to hedge against financial turmoil. Exploring alternative markets and investments will play a crucial role.
Second, there are the US elections. With the debate between Trump and Biden kicking off today, an interesting trend will be set. No one knows who the US President will be later this year. Either candidate has their work cut out for them, potentially leading to more financial instability.
All of this has given rise to bullish sentiment among UB Global Wealth Management. According to Kelvin Tay, gold is likely to hit $2,000 per ounce later this year. It is a price level the world has seen before in 2020, but one that proved difficult to sustain. Whether the second run will be more successful, remains unclear at this time.
Will Gold Actually Recover Later This Year?
The sentiment by UBS is rather intriguing, but it may not necessarily be correct. Investors and speculators haven’t been impressed with the gold price as of late. Despite the prominent trend in the first 7 months of 2020, things have certainly cooled off quite a bit. As such, the value per ounce has dropped by roughly $200 compared to the high of 2020.
With all of these external circumstances now converging, interesting things are bound to happen. Despite what UBS may claim, it will not necessarily yield a surge in gold value. At the same time, there will be some changes in the financial ecosystem regardless. What those will entail exactly, is anyone’s guess at this point.