Gold prices may see near-term pressure after an extended rally, but the broader bullish narrative remains firmly in place, according to UBS Global Research precious-metals strategist Joni Teves.
In a research note, Teves highlights that concerns over the U.S. Federal Reserve’s independence, escalating geopolitical risks, and widening political uncertainty continue to underpin investor demand for gold as a strategic safe-haven asset.
However, she cautions that recent price action has become stretched, increasing the likelihood of an interim correction. As a result, UBS prefers to stay on the sidelines in the short term, despite maintaining a constructive medium- to long-term view.
“Short-term price action is starting to get excessive, in our view, and the risk of an interim correction is rising,” Teves noted.
Reflecting these near-term pressures, spot gold was down 3.9% at $5,161.91 per ounce, even as longer-term risks remain skewed to the upside.
Frequently Asked Questions
Why are gold prices under pressure in the short term?
Gold has seen a sharp rally, making prices look stretched. This increases the risk of profit-taking and a temporary correction.
What factors continue to support gold in the long run?
Concerns over the Fed’s independence, rising geopolitical tensions, and broader political uncertainty are keeping gold’s long-term outlook positive.
What is UBS’s current stance on gold?
UBS prefers to stay on the sidelines for now, citing excessive short-term price action, while remaining bullish over the medium to long term.
Does UBS see downside risk for gold ahead?
Near-term downside risk exists due to a potential correction, but medium- to long-term risks are still tilted to the upside.
Where are gold prices currently trading?
Spot gold was last seen down about 3.9%, trading near $5,161.91 per ounce
