Another member joins the bullish camp for Wall Street gold! UBS Bank increases its position and reiterates a target price of $6,000.

Union Bancaire Prive (UBP) has resumed buying gold after cutting a significant amount of positions due to the drop in gold prices triggered by the Middle East conflict and believes that the long-term prospects for gold remain strong. Since the outbreak of the Middle East conflict, the price of gold has dropped significantly. This contradicts the traditional view that gold, as a safe haven asset, provides stability (or appreciation) in times of market volatility, increased uncertainty, or geopolitical tensions. Analysts believe that the rise in energy prices is forcing the market to reprice the monetary policy path of central banks. Investors expect major central banks such as the European Central Bank and the Bank of England to lean towards hiking interest rates this year, which contrasts sharply with the pre-war market's general expectation of keeping rates unchanged or cutting them. The prospect of higher interest rates directly suppresses non-interest-bearing assets such as gold, making the US dollar a more attractive safe haven tool at this stage. In addition, during times of crisis, investors will rotate between assets, and losses in the stock market will also lead to additional margin trading demands. Gold is one of the few assets that can be liquidated at any time, providing liquidity, and is less likely to incur significant losses, which has led to gold being sold off during this Middle East conflict. Currently, Union Bancaire Prive is gradually reintroducing gold into its fully discretionary client investment portfolios. After reducing the gold allocation from around 10% to 3%, this Swiss private bank is now increasing the allocation again. The bank plans to further rebuild its gold position, which is mainly composed of exchange-traded funds (ETFs) supported by physical gold. The gold allocation has now risen to approximately 6% of the fully discretionary investment portfolio. Paras Gupta, Director of Fully Discretionary Portfolio Management at Union Bancaire Prive in Asia, said in an interview that after the "one-way positioning" was cleared, "we have taken the first step towards rebuilding" the gold investment portfolio. He added that the gold positions of institutional investors and retail investors are currently "fairly balanced." As of last year, the bank managed client assets worth approximately 184.5 billion Swiss francs (about 233 billion US dollars). Gupta said that the bank still expects the price of gold to rise to $6,000 per ounce by the end of this year, as structural demand, including major central bank gold purchases, concerns about fiscal deficits, and geopolitical tensions, continues to exist. Union Bancaire Prive maintains its forecast of gold prices reaching $6,000 per ounce by the end of the year. Due to the lack of results in the negotiations between the US and Iran, and the US stating that it will block the Strait of Hormuz, the price of gold fell on Monday. As of the time of writing, spot gold fell by 0.36% to $4,730.88 per ounce. Since the outbreak of the Middle East conflict, with the surge in energy prices and investors focusing on inflation risks, the price of gold has fallen by about ten percent. Gupta said, "Inflation risks are becoming more apparent faster." He added that this could create pressure on gold in the short term, but macro forecasts do not point to an economic recession. However, recently, buying on dips has begun to enter the market, helping gold recover some of its losses. According to statistics, after the largest monthly outflow of funds in five years in March, the global holdings of gold-backed ETFs increased by about 20 tons in April. In response, Gupta pointed out that further buying "needs more clarity on how geopolitical events will evolve. We have not seen that yet". He added, "The events over the weekend will only reinforce the market's demand for more clarity." In short, in the view of some senior analysts on Wall Street who are bullish on gold in the long term, the current price curve of gold seems more like a repairable bullish trajectory playing out "the logic of a long-term bull market not collapsing, and the bulls regaining pricing power after a deep retracement in the short term", while emphasizing that currency depreciation, long-term inflation risks, and worsening fiscal deficits after the end of geopolitical conflicts are still long-term structurally favorable factors for gold.