On Thursday, December 9, 2021, workers remove a cooled 12 kilogram gold ingot from the mold at the foundry of the Prioksky non-ferrous metal factory in Kasimov, Russia.
Andrey Rudakov | Bloomberg | Getty Images
Even if Treasury yield for 10 years And that US dollar index Precious metals exceeded $ 1,800 per troy ounce, rising from a year-end low towards the end of January. As of Friday afternoon, spot gold was still trading around its $ 1,800 / oz marker.
Despite the difficult macro background of supply chain problems, inflation surges and protracted pandemic risks, Bank of America Strategists point out that some of the gold investment flows are highly resilient.
“The significant turmoil under headline inflation, interest rates and currency movements has made it more attractive to have yellow metal in our portfolio, with an average gold of $ 1,925 per ounce in 2022,” said BofA analysts. We support price forecasts. ” The end of January.
According to, it is also the center of gold resilience UBSIs a combination of rising demand for portfolio hedging and the belief that the Federal Reserve is “lagging” in its efforts to tackle inflation or tightening too much to slow growth.
In a Friday note, UBS Chief Investment Officer strategist said that gold’s “trial and error insurance features” are again against other common portfolio diversification factors, including digital assets such as: I emphasized that it was shining. Bitcoin..
“On the other hand, overall stability in the face of the Fed’s hawkish pivot, money market participants have shifted to aggressively pricing a number of US rate hikes in 2022. US 10-year TIPS bonds I was surprised at some. “
“But instead, the elasticity of yellow metal is in close agreement with the estimates generated by the fair value model. Currently, it shows a value of about $ 1,750 / ounce. This is $ 50 / ounce for the spot. It’s a modest discount on ounces. “
UBS’s model shows that the market is highly volatile so far this year. VIX indexIs the main pillar of gold price support.
“For example, if you plug the long-term mean of VIX into 19.5 (everything else is equal), this shows a gold price of about $ 1,575 / ounce. So, as we claimed, the first quarter of 2010. Increasing Demand Portfolio hedging supports the forecast of US $ 1,800 per ounce, “said UBS strategists Wayne Gordon, Giovannista Unovo and Dominique Schneider.
However, UBS maintains expectations that gold will fall in the range of $ 1,650 to $ 1,700 / ounce in late 2022. Houseviews of Swiss creditors predict that risk sentiment will improve as the dual threat of the Omicron Covid-19 variant and inflation is mitigated.
“We encourage clients to reduce tactical quotas and protect the downsides of strategic holdings,” they added.
Markets need to lose some confidence in the central bank’s policy tightening plans for gold to exceed $ 1,800 per ounce, according to Russ Mold, investment director at AJ Bell, a UK equity brokerage platform. Maybe.
In a note on Tuesday, Mold suggested that this could happen if the economy went into recession. Before inflation is suppressed “