The Swiss investment bank UBS is extremely bullish on gold as we close out the year. It has called for much higher prices in 2023, with analysts tipping the yellow metal to hit near record highs.
Joni Teves, who serves as the bank’s precious metal authority issued her forecast for 2023 this week and in it, she said that she expects gold to be trading around £1,625 ($1,900) by the end of the year, setting the stage for a push even higher.
She said that the bank sees the Federal Reserve moving away from punishing rate hikes. When that happens, the yellow metal will be in a position of great strength. She explained, “We think gold should benefit and therefore holding a long gold position would offer an attractive risk-reward as the tightening cycle ends.”
Crucially, UBS adds that the rate hikes will likely continue in the first half of 2023 – but that this should be regarded as an opportunity to add gold to your portfolio before prices escalate, adding “We think any weakness in gold in the coming months should ultimately offer opportunities to position for a move higher in prices over the course of 2023, as the Fed pauses tightening and eventually shifts to a more dovish stance.”
UBS cites historical data which gives gold a 19% price increase for each 1% rate cut as the basis for its expectation that prices will perform well as we move into the latter half of the year. The bank also noted that a probable recession could prompt the Feds to begin rate cuts earlier than may previously have been expected, suggesting that gold prices could climb sooner and go further than the current £1,625 ($1,900) target.
Don’t delay. Add gold to your portfolio now to be in a position of strength in 2023.
