The current weak spot of gold represents a “nice entry level for buyers” forward of threat occasions such because the US election, stated UBS International Wealth Administration.
“We like gold, as a result of we predict that gold is more likely to truly hit about $ 2,000 per ounce by the top of the 12 months,” the agency’s regional chief funding officer Kelvin Tay instructed CNBC.
He defined that “in [the] occasion of uncertainty over the US election and the Covid-19 pandemic, gold is a really, excellent hedge.”
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Gold costs skyrocketed to file highs this 12 months, surpassing $ 2,000 per ounce in August for the primary time in historical past. The worth of bullion has dipped recently, buying and selling at round $ 1,900 per ounce as of Tuesday.
In response to Tay, the valuable metallic can also be enticing as a result of low rate of interest atmosphere. He identified that if rates of interest keep low because the US Federal Reserve has indicated, the chance price of holding gold (which is a non-yielding asset) will probably be “fairly low.” That’s as a result of buyers will not be forgoing curiosity that might be in any other case earned in yielding property.
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