“We like gold, because we think that gold is likely to actually hit about $2,000 per ounce by the end of the year,” Kelvin Tay, regional chief investment officer at UBS Global Wealth Management told CNBC.
Gold prices have shot to record highs this year — above $2,000 per ounce for the first time. Recently however, prices have slipped and last traded at around $1,884 per ounce.
“We like gold, because we think that gold is likely to actually hit about $2,000 per ounce by the end of the year,” according to Kelvin Tay, the firm’s regional chief investment officer, on Tuesday.
“And gold has certain hedges to it,” Tay said. “In (the) event of uncertainty over the U.S. election and the Covid-19 pandemic, gold is a very, very good hedge. And its recent weakness represents a great entry point for investors,” he added, speaking to CNBC’s “Squawk Box.”
Gold prices have shot to record highs this year — and surpassed $2,000 per ounce for the first time in history. Recently, however, prices have dipped again and last traded at around $1,880 per ounce as of Tuesday afternoon during Asia hours.
The precious metal is also attractive due to the low interest rate environment, Tay pointed out.
If interest rates stay low as the Fed has indicated, the opportunity cost of holding gold — a non-yielding asset — will be “quite low,” he added. That’s because investors are not forgoing interest that would be otherwise earned in yielding assets.
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