A 10% spike for gold

1.23.24 - A 10% spike for gold

Gold last traded at $2,029 an ounce. Silver at $22.44 an ounce.

UBS sees a 10% spike for gold this year as rate cut speculation swirls -CNBC

Gold prices could close the year as much as 10% above current levels on the back of potential interest rate cuts, UBS strategists said, despite declines at the start of 2024.

A UBS note on Friday described recent price moves as "minor" in the context of the precious metal's 15% climb through 2023 and said the "power of the [Federal Reserve]'s policy pivot should not be underestimated."

Bullion remains above the psychological level of $2,000 per ounce, the UBS strategists said, forecasting a rise to $2,250 per ounce by the end of the year, despite near-time volatility.

Analysts at Scotiabank retained a more cautious outlook, but revised their price guidance higher. In a Monday note, they said they had adopted higher gold and silver prices for this and next year, and moved their year-end gold forecast to $2,000 per ounce, from $1,900 per ounce, previously.

Gold prices can be impacted by factors including geopolitical instability and market uncertainty - which can boost the appeal of bullion as a "safe haven" asset - and interest rates, which can make higher-yielding investments more attractive when they are raised.