Commodities
UBS Sticks to Bullish Gold Outlook Despite Price Slump
The gold price in US Dollars (XAU/USD) has fallen to around $4,280 an ounce, down 1.92% from its previous level.
This decline has pushed the metal back towards last week's lows, testing UBS's view that tighter US monetary policy can coexist with a positive longer-term outlook for gold.
UBS acknowledges that the Federal Reserve's latest rate increase could keep inflation-adjusted US yields and the Dollar elevated, weighing on gold. However, it remains optimistic about gold's prospects due to central bank demand, reserve diversification, and global debt concerns.
The World Gold Council's June survey of reserve managers found that 89% expected global central-bank gold holdings to increase over the following year.