UBS Wealth Management: Current Gold Price Weakness is Temporary, Expected to Rise to $5,900 by Year-End

A commentary from the Asia-Pacific Investment Director’s Office of the bank pointed out that gold prices have declined for two consecutive weeks, mainly due to rising energy prices, a stronger US dollar, and higher real yields. However, institutional and retail investor demand for gold remains strong, indicating that there is still upside potential for gold prices. Data from the World Gold Council shows that demand for gold bars and coins surged by 42%, reaching a record high for individual physical gold purchases in a single quarter, mainly driven by the Asian market. Central bank gold purchases have also remained at high levels, with annual purchases expected to reach 900 to 1,000 tonnes. UBS Wealth Management believes that ongoing demand from central banks and Middle Eastern sovereign wealth funds will continue to support gold prices. In addition, factors such as political uncertainty, concerns over fiscal deficits, and a possible weakening US dollar at the end of the year make gold an attractive tool for value storage.