A client note from UBS on gold, asking "Is gold still a safe haven?" given its recent stall.
Some snippets of interest:
- Gold looks attractive here as a hedge against the backdrop of negative rates and acute uncertainty that is likely to persist.
- We expect safe haven and diversification flows to continue
- The resilience of gold ETFs is encouraging and coincides with increasing strategic interest
- We reiterate our view from last week targeting $1650 over a 3-month timeframe, following consolidation of stretched positioning in the very near term. Risks are skewed to the upside in H1 given the potential for a larger drag to economic growth than we expect and corresponding policy easing.
- Looking beyond to the second half of the year is becoming more challenging as the situation with COVID- 19 and the potential impact continues to evolve globally.
