As global financial market volatility intensifies, gold has once again become a focal point for investors. In her latest analysis, UBS precious metals strategist Joni Teves notes that despite recent record highs in gold prices, its potential for further gains remains substantial, especially as investors' gold allocation remains insufficient. Teves predicts that next year, gold prices are expected to surpass the $3,000 mark.
In an interview, Teves pointed out that gold prices have nearly reached the year-end target months in advance, recently surpassing $2,700 and continuing to set new records. This trend indicates strong demand for gold in the market. She stated, "We remain optimistic about the prospects for gold, particularly as the Federal Reserve's accommodative policies continue to support gold prices, and ongoing purchases by global central banks will provide strong support for gold prices."
UBS believes that investors' current gold holdings are still lacking, with room for further allocation increases in the market. This underallocation is especially pronounced against the backdrop of rising gold prices. Teves emphasized that demand for physical gold remains robust, especially amid increasing global geopolitical uncertainties.
Looking ahead, Teves predicts that by the end of this year, gold prices are likely to reach $2,800, and by next year, with increasing uncertainties, gold could potentially surpass $3,000. She specifically mentioned that in the coming weeks, geopolitical risks and the uncertainty of the U.S. presidential election will continue to drive gold price fluctuations, and investors should be prepared for this.
Additionally, Teves responded to financial expert Mohamed El-Erian's view on gold decoupling from traditional drivers. She stated that gold's performance has indeed at times diverged from its traditional relationship with real interest rates and the dollar, but this is mainly due to central bank gold purchases and strong physical demand forming independent support for the market.
As for how to invest in gold at record high prices, Teves pointed out that it depends on investors' risk preferences and goals. She suggested that those looking to avoid credit risk could opt for physical gold, while those seeking higher leverage could consider mining company stocks or other precious metals like silver.
As of this Wednesday (October 23rd), after reaching a record high of $2,748, gold prices edged back slightly and are currently trading near $2,738.68 per ounce. With global developments, the future trajectory of the gold market remains full of uncertainties.
