Gold has experienced a significant correction due to Middle East geopolitical risks and rising real yields, but remains an attractive long-term diversifier. UBS expects a recovery in prices driven by central bank demand and persistent government debt concerns.
Key Takeaways
- 1.Gold has faced significant headwinds due to the Middle East conflict and rising interest rate expectations, leading to a 22% decline from January highs.
- 2.Despite near-term volatility, UBS views gold as a strategic portfolio diversifier supported by central bank demand and rising government debt burdens.
Table of Contents
- What role can gold play in portfolios?
- The Middle East crisis has presented headwinds for gold.
- While a US-Iran peace deal will help, the outlook for gold has become less bright.
- That said, we expect gold to recover over the coming year and see it as a good diversifier for portfolios.
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Authors
Dominic SchniderGiovanni StaunovoChristopher SwannJon Gordon
Securities
XAU2-year US Treasury
Themes
Geopolitical riskOpportunity cost of capitalCentral bank reserve diversification
Regions
Middle EastUnited StatesIranIsrael