gold

UBS Group states that gold is in a key buying range during price declines, expected to have stable growth, and recommends allocating 5% in a balanced investment portfolio.

UBS warns: What has kept gold's stable value under the new US leadership?

Global investment bank UBS released a report on Monday, emphasizing that despite speculators turning to stocks after the US presidential election, the enduring value of gold as a hedge instrument still exists. While the market shows optimism, UBS warns that under the new government leadership, policy uncertainty remains high.

The report points out that the downward trend in the US dollar and treasury yields may support the rise in gold prices over the next few months:

The key is that the fundamental support for gold as a hedge and diversification investment tool remains very solid.

UBS Group advises investors to remain cautious, pointing out the uncertainty of new government policies. UBS Group explains in detail: "Investors need to remember that there are still many unknowns in Trump's policy agenda, including which existing policies may be reversed. This uncertainty is highly two-sided, especially in situations where the market's pricing of risks is imbalanced. Investors should continue to hold gold as a hedge tool in their portfolios, for the following reasons."

This volatility emphasizes the importance of holding gold as a core investment portfolio hedge tool. UBS Group supplements several key reasons for holding gold. "Firstly, as the Fed further lowers interest rates, funds supporting exchange-traded funds backed by gold should continue to flow in," the bank said. "Secondly, long-term risks (such as a sharp increase in US fiscal deficits) and potential tariffs affecting the US and global economies should drive demand for hedging. Moreover, "the continued demand from central banks in the diversification of foreign exchange reserves, including the dollar component, should be supported by tariffs and the increasing US fiscal deficits." As of the writing of this article, the gold trading price is $2,614.10. Global investment banks recommend:"

We recommend investors to buy the dip at around $2,600 per ounce. We maintain the target at $2,900 per ounce within 12 months. We also continue to recommend allocating 5% gold in a balanced investment portfolio denominated in US dollars.