Spot gold reclaimed the $5,000 per ounce mark early on Feb 4, reaching as high as $5,046. Compared to Monday's low of $4,405, this rally represents a nearly 15% gain, indicating strong dip-buying demand.
UBS and Bank of America Turn Bullish: Gold Could Target Higher Levels
After the recent selloff, multiple institutions maintain a positive outlook for gold. UBS forecasts a chance for gold to reach $6,200 by end-2026, with a bull case of $7,200; Bank of America previously predicted a spring challenge at $6,000. Technically, gold is approaching the next resistance at $5,110. Under the tug-of-war between short-term policy headwinds and long-term fiscal concerns, sharp volatility may become the norm.
Silver, which had plunged as much as 40% earlier, rebounded over 20% from Monday's low to $87.4 per ounce.
Dalio: Gold Essential for Portfolio Diversification
Bridgewater Associates founder Ray Dalio recently urged investors to include gold in their asset allocation. He noted gold's strong diversification benefits, outperforming during downturns and performing steadily in booms. Dalio stated, "Gold has risen about 65% since last year and is down about 16% from its peak. Investors should focus not on short-term swings but on how much gold to hold for diversification." He emphasized a well-diversified portfolio to navigate global uncertainty and potential capital war risks.
Key drivers include U.S. fiscal conditions, continued central bank buying (Goldman Sachs estimates ~60 tonnes monthly), and geopolitical risks such as the Iran situation.