Bitcoin price today: rises above $111k amid easing trade jitters; US CPI on tap
Investing.com -- Investors should use market dips to boost their exposure to gold, UBS strategists say, arguing that the metal remains fundamentally supported and could climb as high as $4,700 per ounce.
After a steep 6.6% drop on Tuesday — the sharpest intraday decline in more than a decade — gold prices stabilized, following a strong rally earlier this year that saw gains of more than 65%. Silver surged nearly 90% over the same period.
The pullback reflected profit-taking after overbought signals, but “precious metals should remain supported by a combination of macroeconomic, fundamental, and momentum-driven factors,” strategists led by Ulrike Hoffmann-Burchard said in a note.
They expect global debt levels, fiscal deficits, and the Federal Reserve’s easing path to sustain a favorable backdrop for gold.
Strategists said that U.S. real rates could fall below zero amid sticky inflation and slower growth, which would further weaken the dollar and support flows into gold and silver.
Investor appetite remains robust, with UBS highlighting record inflows into gold exchange-traded funds of $17 billion in September and $26 billion for the quarter — the largest on record, according to the World Gold Council.
Combined with steady central bank purchases, global gold demand is projected to reach 4,850 metric tons this year, the highest since 2011.
“Ongoing political uncertainty should remain a tailwind,” strategists wrote, adding that some investors appear to be “stepping in to buy the dip.”
“With the U.S. government still in shutdown and economic and geopolitical uncertainties persisting, we expect continued safe-haven demand to support precious metal,” they added.
The team continues to view gold as an effective portfolio diversifier and recommends “using setbacks to add holdings if they are below our optimal mid-single-digit allocation in a diversified portfolio.”
Strategists said they also see value in silver exposure, expecting the metal to rebound to $55 per ounce by June 2026, while suggesting that investors may look to sell its downside risk.