Swiss private bank Union Bancaire Privée (UBP) is returning to gold purchases after previously cutting a significant portion of its holdings amid a market downturn triggered by the Iran war. Despite recent volatility, the bank believes the long-term outlook for the precious metal remains strong.
Returning to the Market After a Sell-Off
According to Bloomberg, UBP is gradually increasing gold exposure in client portfolios. The bank had earlier reduced its allocation from around 10% to 3% in response to the sharp decline. It has now rebuilt the share to about 6% and plans to continue adding.
“We have taken the first steps to rebuild gold portfolios after the flush-out of one-sided positions,” said Paras Gupta, Head of Discretionary Portfolio Management in Asia.
He added that, following the sell-off, the balance between institutional and retail investors has become “much more stable.”
Why Gold Declined
The recent drop in gold prices has been driven by several factors:
- expectations of higher interest rates;
- liquidity constraints in financial markets;
- forced asset sales by investors to cover losses elsewhere.
Rising energy prices have also added pressure by increasing inflation risks.
“The risk of inflation is coming in more immediately,” Gupta noted.
Forecast: $6,000 by Year-End
Despite short-term volatility, UBP maintains a highly bullish outlook. The bank expects gold prices to reach $6,000 per ounce by the end of the year.
This forecast is based on structural drivers:
- strong demand from central banks;
- growing global fiscal deficits;
- ongoing geopolitical tensions.
Market View Aligns
UBP’s stance is not unique. According to Bloomberg, several major investment banks continue to support a positive long-term outlook for gold.
In particular, Goldman Sachs and ANZ Banking Group have reaffirmed their expectations of higher gold prices despite the recent correction.
Investors Are Returning
After March’s sell-off, investor interest in gold is gradually recovering. In April, global gold-backed ETFs increased their holdings by around 20 tons — the first significant inflow after the largest monthly outflow in five years.
However, UBP stresses that further buying will depend on greater geopolitical clarity.
“Additional investments require much more clarity on how global events will unfold. We don’t have that right now,” Gupta said.
Uncertainty Remains the Key Factor
Recent developments — including unresolved US-Iran talks and threats to block the Strait of Hormuz — have only heightened uncertainty.
According to analysts, this factor will shape the gold market in the coming months, balancing short-term pressure against long-term growth.
This article was prepared based on materials published by Bloomberg. The author does not claim authorship of the original text but presents their interpretation of the content for informational purposes.
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