Gold could touch $6,000 by 2026-end, says Swiss bank
What's the story
Union Bancaire Privee (UBP), a prominent Swiss private bank, is re-entering the gold market after a major position cut due to the Iran war. The bank had reduced its exposure from around 10% to 3% but is now gradually adding bullion back into discretionary client portfolios. Paras Gupta, Head of Discretionary Portfolio Management in Asia at UBP, said they have "We have taken the first steps to rebuild" their gold portfolios after the flush-out of "one-sided positions."
Portfolio balance
'Quite balanced' positions
Gupta further stated that the bullion positions of institutional and retail investors are now "quite balanced." The bank, which managed some $233 billion of client assets as of last year, is looking to rebuild its gold positions mainly in bullion-backed exchange-traded funds (ETFs). These have recovered to about 6% of discretionary portfolios.
Price forecast
UBP remains optimistic about gold prices
Despite the recent downturn, UBP remains optimistic about gold prices, predicting they could reach $6,000 an ounce by year-end. Gupta said this is due to structural demand factors such as central bank buying, fiscal deficit concerns, and geopolitical tensions. However, he also acknowledged that inflation risks are more immediate and could weigh on gold in the short term.
Caution advised
Need for clarity on geopolitical events
Gupta stressed that any further buying would require more clarity on geopolitical events. He said, "The events over the weekend only reinforce the need for more clarity." This cautious approach is in line with a number of investment banks that have recently reaffirmed their bullish long-term outlook on bullion despite its recent downturn.