Gold fell on Thursday. If you like it UBS Global Wealth Management outline three reasons to buy.

1. Central bank demand should remain robust

  • 2022 was the 13th straight year that central banks were net buyers of gold, and demand is likely to continue
  • “Based on the 1Q23 data from the World Gold Council, central banks are on track to buy around 700 metric tons of gold this year, much higher than the average since 2010 of below 500 metric tons"

2. USD weakness

  • A lower dollar index (down for the YTD) should be supportive for gold prices
  • “The direction of a weakening dollar is clear, with the US Fed having signaled a pause in its current tightening cycle after 500 basis points of rate hikes over the past 14 months”

3. Recession risk

  • “Overall, recent data coming out of the US showed the country’s growth is slowing, with weaker-than-expected 1Q GDP, six consecutive months of contracting manufacturing activity, and the weakest consumer sentiment since November”
gold weekly candles UBS 19 May 2023