UBS reiterates bullish stance on gold, calling the recent decline a delayed reaction rather than a safe-haven failure

(1) On Monday local time, the UBS Global Wealth Management team released a report, further strengthening its bullish stance on gold. UBS analyst Wayne Gordon and his team stated that although the gold price has recently declined, they believe investors should still hold gold as a defensive hedge tool. (2) UBS attributed the recent drop in gold prices to several factors, such as weakening investor confidence in a Federal Reserve rate cut and reduced market speculation momentum. However, in Gordon’s view, if history is any guide, it may be too early to have a negative outlook on gold’s future prospects. (3) He said: “As the market is adapting to anticipated higher interest rates and a stronger US dollar—both of which are short-term obstacles to gold prices—gold’s value-preserving role in the early part of the cycle has been under pressure. However, this is not a failure of gold's safe-haven function, but rather a delay.”