Gold Could Top $1,700 Per Oz in H1 2020: UBS

SEATTLE (Scrap Monster): The investment banking company UBS, in its latest research report, noted that gold prices are likely to remain well–supported in the first half of 2020. The prices are likely to top $1,700 per Oz in H1 2020, it said. However, the prices are likely to witness a pull back after that, said Joni Teves, strategist at UBS.

The increased investment demand for safe-haven assets has boosted gold’s prospects. Also, gold has risen even when U.S equities were on the run.

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According to the report, the recent rally in gold prices was mainly triggered by fears about the Coronavirus outbreak in China and its impact on global economy. UBS considers that the economic impact is likely to remain limited to the first quarter of the year. The longer impact could be possible in the event of outbreaks spreading to other countries.

An expected Fed cut in April this year, along with further escalation of the Covid-19 outbreak will propel the gold market to higher levels, with prices expected to hit $1,700 per ounce. However, a downward correction is expected during the second half of the year, mainly on account of possible recovery in economic growth. However, the extent of the downside will be limited by long-term diversification interest. Gold will continue to remain as a strategic asset for portfolio diversification and as a hedge against uncertainty, UBS report said.