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General Precious Metals
UBS Says It’s Staying Long Gold as Price Now Destined for $1,600
Gold will extend its winning ways as the U.S.-China standoff harms growth, risking a deeper slowdown and inviting more central-bank easing, according to UBS Group AG, which jacked up price forecasts with a prediction the precious metal may hit $1,600 within three months.
“The trade war between the U.S. and China has escalated to a new level,” Giovanni Staunovo and Wayne Gordon, analysts at the wealth-management unit, said in a report received on Monday. “Gold has demonstrated its safe-haven qualities and we stay long the metal, a trade we initiated in mid-May.”
Gold is proving its worth as a haven this year as the two largest economies trade blows, with a significant escalation on Friday, followed by more hard-line remarks from President Donald Trump over the weekend. The Federal Reserve reduced interest rates last month as risks mounted, and some U.S. policy makers have stepped up their warnings about the outlook in recent days.
After its revisions, UBS has a three-month trading range of $1,450 to $1,600 an ounce, plus a six-month forecast of $1,600 and 12-month view of $1,650. Previously, both the half-year and 12-month outlooks were set at $1,500.