UBS Wealth Management and Investment Director's Office issued an institutional opinion on October 12, stating that it maintains a positive view on gold in the medium term. As the market revises expectations of the Fed's interest rate hike, the agency believes that the price of gold is expected to regain momentum towards the end of the year and continue until 2027. Both the US real yield and the US dollar exchange rate have risen, increasing the opportunity cost of holding gold, which has led to the recent weakening of gold prices. However, in the face of a sharp rise in yield, gold showed remarkable resilience. The sensitivity of gold prices to real interest rates has declined, indicating that structural demand provides a stronger buffering effect than in previous cycles. The agency predicts that the central bank's annual gold purchases will be between 750 tons and 1,000 tons, providing important structural support for gold prices. UBS believes that in the short term, the price of gold may once again test support around $4,000 per ounce, and structural demand to buy on dips is expected to form bottom support at this level. As the market re-evaluates the Federal Reserve's policy space for further tightening, the decline in real yields should push the price of gold back up. The agency is still optimistic about the long-term investment logic of gold. The fall in the price of gold to around 4,000 US dollars can be seen as an opportunity to increase positions. For investors who prefer real assets, it is more appropriate to allocate a single-digit ratio of gold in a fully diversified portfolio.

Disclaimer:Webull uses external vendor Google Translation Service for news translations where we endeavour to ensure these are correct, however, we recommend that you please double-check this information accordingly. Webull is not responsible for translation errors or issues.