Gold Back in Focus as Swiss Bank UBP Sees $6,000 By Year End

Union Bancaire Privée (UBP) has started adding gold back into client portfolios after sharply cutting exposure during the recent war driven decline, as per Bloomberg report.  

The Swiss private bank believes the long-term case for bullion remains intact, even though short-term uncertainty continues to weigh on prices. 

Union Bancaire Privée Rebuilds Gold Exposure 

Union Bancaire Privée earlier reduced gold exposure in discretionary client portfolios to 3% from around 10% as markets reacted to the Iran war and the resulting pressure on global assets.  

The selloff in bullion was linked to fears of higher interest rates and a liquidity squeeze, which forced investors to offload holdings to cover losses in other areas. 

Now, the bank is gradually rebuilding those positions. According to Paras Gupta, Head of Discretionary Portfolio Management in Asia, the first steps have already been taken after what he described as a flush out of crowded positions. Gold exposure has now recovered to around 6% of discretionary portfolios. 

Why Gold At $6,000 Remains Part of The Outlook 

As per Bloomberg report, A key part of the bank’s view is its expectation that gold prices could rise to $6,000 an ounce by the end of the year. That outlook is based on structural demand rather than only short-term price movements. 

Union Bancaire Privée believes central bank buying, concerns over fiscal deficits, and continuing geopolitical tension still support the long-term direction of bullion.  

The bank also noted that institutional and retail investor positions now appear more balanced, which may provide a healthier backdrop for gold going forward. 

Iran War and Inflation Risks Weigh on Bullion 

Gold has remained under pressure as geopolitical risks continue to evolve. Prices fell again after peace talks between the United States and Iran ended without resolution and concerns grew over the Strait of Hormuz. 

At the same time, rising energy prices have increased inflation concerns. Gupta said inflation risk is emerging more immediately, which could keep gold under pressure in the short run.  

However, he also noted that the broader macro-outlook does not currently point to a recession. 

Read More: Indian Households Own $5 Trillion in Gold, Surpassing Top 10 Central Banks Combined: ASSOCHAM! 

Gold ETF Holdings Show a Partial Recovery 

There are early signs that buyers are returning. Holdings in gold backed exchange traded funds rose by around 20 tonnes in April after March saw the biggest monthly outflows in five years. This suggests some investors are once again using weakness in bullion to rebuild positions. 

Conclusion 

Union Bancaire Privée’s stance highlights that recent weakness in gold has not changed its broader view. Even after reducing exposure during the Iran war slump, the bank is rebuilding positions and still sees gold at $6,000. While inflation risks and geopolitical uncertainty may keep bullion volatile in the near term, the long term outlook remains central to its strategy. 

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