Switzerland's biggest bank is telling its customers to buy gold, even as experts in precious metals are contradicting each other over which way the price will go in coming months.
The price for an ounce of gold in early May reached a 15-month high of $1,300, before retreating to almost 1,200. UBS signaled to its customers that this was a good buying opportunity, in its latest analysis of the gold price according to «Kitco», a news portal specialized in precious metals.
UBS said the price of gold had dropped for three reasons: the appreciation of the dollar, a rise of equity prices and increasing yields on 10-year government bonds.
Second Chance to Buy
Gold will likely retain its characteristic as a hedge, despite these factors, UBS' analysts said. The investors who missed the opportunity to buy gold in January now have been given a second chance to do so.
UBS didn't provide a target price for gold. Other experts in the precious metal however expect a substantial appreciation, with the price reaching as much as $2,300 in the medium term.
Others Remain Doubtful
Stephan Jones by contrast, the investment boss at Kames Capital, the Scottish asset manager, remains more doubtful. He believes the recent appreciation to be but a brief increase in a bear market.
