The price of gold is hovering around the $1,500 mark. Many gold investors are waiting for the next price break. At UBS, the major Swiss bank, one sees above all an opportunity to buy more gold.
The gold price recently moved around the 1,500 US dollar mark. Last Tuesday after the close of the US stock market, 1,505 US dollars per ounce were paid on the spot market. This was equivalent to 1,374 euros (+0.96 percent). What will happen with the price? You might think that the central banks are doing everything they can to dilute the credit money. Gold has proven to be stable in value over thousands of years in terms of purchasing power. No wonder, then, that the precious metal will sooner or later appreciate against the legal currencies.
The speculative element
In the short term, the price of gold is naturally subject to repeated fluctuations. This applies to all assets traded on the stock markets. Because there are speculative exaggerations and understatements – and manipulations. And at the same time there are always opportunities to invest a little less money for an ounce – in order to insure oneself against all kinds of financial repression these days.
No end to the rally
This is also the view of Dominic Schnider, a leading member of the asset management team at UBS, a major Swiss bank. He does not believe that the gold price has reached the end of its month-long rally at current rates of 1,500 US dollars per ounce. The size of speculative long positions shows that many have already invested in gold (see article on the latest CoT data). “However, I think that any back-setter at this level is a buying opportunity,” Schnider told Bloomberg. He expects rates of 1,550 US dollars towards the end of the year. In the coming year he expects 1,650 US dollars per ounce.
He sees the trade war issue (USA/China/EU) as one of the short-term relevant reasons. Even more important, however, is the expectation that the US Federal Reserve will cut interest rates several times in the coming months, so that real interest rates will remain negative. Schnider: “Why should we do without gold? Especially for equity investors, it ensures stability in the portfolio in the current environment.