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Manila Bulletin devider Business devider Banking & Finance devider Gold's safe-haven appeal rising amid economic uncertainties — UBS

Gold's safe-haven appeal rising amid economic uncertainties — UBS

Published May 15, 2025 10:13 pm

At A Glance

  • Swiss banking giant UBS expects gold prices to keep climbing, citing rising global trade uncertainties that are boosting the metal's appeal as a safe-haven asset during economic turbulence.

Swiss banking giant UBS expects gold prices to keep climbing, citing rising global trade uncertainties that are boosting the metal’s appeal as a safe-haven asset during economic turbulence.

“Despite the rally that gold has already achieved this year and the already strong bullish market consensus, positioning indicators that we track suggest that there is still room to run,” said Joni Teves, precious metals strategist at UBS Investment Bank, during the bank’s media briefing on Thursday, May 15.
This means that even though gold prices have already gone up multiple times this year, “there’s room for gold to run higher.”
Teves has updated her forecast and now expects gold prices to rise up to $3,500 per ounce this year.
“And given the tariff uncertainty, given the potential impact of this on the economy and on inflation, I think this creates a bullish backdrop for gold,” Teves noted.
This means the present economic environment makes this safe-haven asset attractive to investors.
But given the volatility surrounding the tariffs imposed by trade giant United States (US), gold prices also tend to be highly volatile, Teves added.
Teves, who was previously a gold trader for the Bangko Sentral ng Pilipinas (BSP), reported that as physical investment demand for gold picked up across various regions, Asia-Pacific (APAC), including the Philippines, stood out.
For the rest of the year, Teves expects physical gold investment to grow further after posting solid growth in the first quarter of 2025, which, according to her, helped offset weaker jewelry demand.
For Asia, which is quite a physical gold market, Teves expects mixed factors that could balance each other.
“On the one hand, jewelry demand is likely going to continue being under pressure because of expensive gold prices,” she said.
“But investment interest will be stronger and help offset some of those losses, given that gold continues to be an attractive asset for investors not just in Asia but globally. And we think that we will continue to see that sort of dynamic,” she further said.
If the US Federal Reserve moves to control inflation, interest rates could soar. This would pose the biggest risk to gold prices, Teves said.
“But that is not our base case, and we continue to expect that gold prices continue to rally into next year,” the strategist said.

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