UBS Designates Gold as Most Preferred in Global Asset Allocation
UBS analysts have once again reaffirmed their bullish outlook on gold, designating it as the most preferred asset in global asset allocation. The precious metal has long been recognized as a safe haven in times of economic and geopolitical uncertainty, and UBS’s latest report highlights its continued relevance in today’s volatile market conditions.
According to UBS, gold is expected to maintain a target price of $2,700 per ounce by mid-2025. This projection is based on a variety of factors, including lower US yield expectations and a trend of central banks diversifying out of US dollars. In fact, gold has already seen a significant increase in value, with a 23% jump in 2024 to reach its highest price ever.
One of the key drivers behind gold’s recent surge is the shift in investor sentiment towards safe-haven assets. As global economic risks continue to mount, investors are turning to gold as a reliable store of value. This is further supported by the European Central Bank’s rate cuts, which have contributed to the overall bullish sentiment surrounding the precious metal.
Outperformance in Volatile Times
Gold has once again proven its worth as a reliable investment during times of high volatility. Despite the ups and downs of the market, gold has consistently outperformed equities, reaffirming its historical tendency to serve as a hedge against uncertainty. This is particularly evident in the current environment, where geopolitical tensions and trade disputes have created a sense of unease among investors.
In addition to its role as a safe haven, gold has also benefited from flows into physically-backed gold ETFs. August marked the fourth consecutive month of inflows into these funds, signaling a growing appetite for exposure to the precious metal. This influx of capital has further boosted gold prices and solidified its position as a preferred asset in global asset allocation strategies.
The Future of Gold
Looking ahead, UBS remains optimistic about the outlook for gold as an investment. The factors driving its current rally are expected to persist, providing a solid foundation for further price appreciation. With ongoing uncertainty surrounding central bank policies and global economic conditions, gold is likely to remain a sought-after asset for investors seeking stability and protection against market volatility.
In conclusion, UBS’s designation of gold as the most preferred asset in global asset allocation reflects the precious metal’s enduring appeal as a safe haven investment. With a target price of $2,700 per ounce by mid-2025, gold is poised to continue its upward trajectory as investors seek refuge from economic and geopolitical uncertainties.
