(Kitco News) – UBS said investors should rethink their bullion holdings as the global economy recovers. The Swiss investment bank told investors to rethink their bullion holdings as the global economy recovers and the dollar strengthens into next year, according to Bloomberg reports.
“The message must be: if you have a tactical position, get out; if you have a strategic position, hedge it,” Dominic Schnider, head of commodities and Asia Pacific foreign exchange at UBS Global Wealth Management CIO Office, was quoted as saying.
The bank thinks the yellow metal could drop closer to $1,600, while silver may fall to $22 or lower, Schnider told Bloomberg TV an interview.
Remember this is only one view as some other brokers are more optimistic, according to Bloomberg, with Goldman Sachs forecasting that prices will hit $2,000 toward the end of the year on the back of increased consumer and central-bank purchasing. Elsewhere Goldman is also retaining its $30 price target for silver.
Looking at the chart below the target sees some way off. Recently the price rejected the consolidation low near the $1700/oz area and pushed up to edge towards the $1800/oz psychological pivot area. The weekly chart shows the next wave high resistance at $1834.14/oz and if this gets taken out it could be a positive sign for the bulls. Only time will tell if the gold bugs can gather enough momentum to take the price there. For now, the market waits for Fed Chair Jerome Powell’s speech tonight where analysts are looking for more clues on the timing of the Fed taper.