Where are gold prices headed? UBS says ‘higher.’


And silver prices might not be far behind

After rallying into the end of the year, the price of gold has been sluggish to start 2024. Prospects for lower inflation have taken away some of gold’s “safe haven” appeal.

But the Swiss bank UBS thinks that’s about to shift. In a new forecast, Joni Teves, UBS’s precious metals strategist predicts the way is clear for gold to reach $2,200 per ounce by the end of the year.

That prediction is based on the belief that the Federal Reserve will begin to lower the federal funds interest rate later this year. Gold tends to be a more attractive investment in a low interest rate environment.

When interest rates go down, the U.S. dollar is usually not far behind. When the dollar is cheap, commodities like gold tend to get more expensive.

When you throw in all the geopolitical uncertainty, then gold may regain its “flight to safety” appeal. And UBS thinks another precious metal could also benefit.

What about silver?

Silver has been in bear market territory for months but might ride gold’s coattails if precious metals begin to gain momentum.

“In a scenario where the Fed is easing, we think silver can do really well. It tends to outperform a move in gold,” Teves told CNBC. “Silver has been underperforming gold quite a lot. So there is a lot of catching up to do and I think the move could be quite dramatic.”

That said, major financial investments should be made with care and with advice from an objective financial advisor. Besides purchasing gold coins and bars – the latter can be ordered from Costco these days – there are gold exchange-traded funds (ETF) and gold mining stocks that can be purchased from stock trading platforms.

When researching gold brokers, it could be helpful to review the ConsumerAffairs’ research teams’ analysis of 25 major dealers, including a deep dive into 3,000 verified consumer reviews. They selected the top five.

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