UBS Wealth Recommends Buying Gold Near $1,200 for Insurance
- Real interest rates seen probably going sideways this year
- UBS likes ‘insurance qualities’ of gold at this kind of level
Gold bangles sit inside a display case at a Chow Tai Fook Jewellery Group Ltd. store in the Central district of Hong Kong, China, on Friday, Jan. 20, 2017. Chow Tai Fook, the world's largest jewelry chain, last year launched the first of a line of mainland shops selling lower-priced jewelry, with average prices of 2,000 yuan ($291), about a third the prices at its flagship stores.
Photographer: Billy H.C. Kwok/BloombergGold will probably trade in a range of $1,200 to $1,300 an ounce in the short-term as the metal tracks U.S. real interest rates, according to UBS Group AG’s wealth management unit.
“We’re not saying we have a bullish bias; we’re not saying we have a bearish bias,” Wayne Gordon, executive director for commodities and foreign exchange, said in an interview on Tuesday. “We’re saying that tactically, people should be buying it somewhere near $1,200 and selling it again somewhere near $1,300, and it’s because we have a view that real rates go sideways. So the pickup in nominal rates will be equally matched by the pickup in inflation.”