That means that gold is unlikely to return in the short term. For that to happen, the inflation picture would have to change, Patterson said. Gold prices have risen in recent weeks as investors seek safe havens in fear that Russia will invade Ukraine, but in the long term, Joni Teves of the UBS Investment Bank predicts that the recent strength in gold prices will be short-lived. He spoke to CNBC on Monday, before Russian President Vladimir Putin ordered the entry of forces into two separatist regions in eastern Ukraine, after announcing that the Kremlin would recognize their independence.
The latest escalation in Ukraine raised doubts about the possibility of a diplomatic solution to the current crisis. Since then, President Joe Biden has ordered sanctions on separatist regions of Ukraine, and the European Union has also promised additional measures. Traditionally, gold is considered a safe investment in times of uncertainty. As the end of the current quarter approaches, the Federal Reserve is expected to raise interest rates at its March meeting to cool inflationary pressures, and Teves said that's likely to put pressure on gold.
Expectations for higher interest rates tend to push up yields on assets such as those of the U.S. Treasury. In the US, which could reduce the attractiveness of an unprofitable asset, such as gold. As Coinbase shares fall, Morgan Stanley is publicly listing major firms with potential exposure to Morgan Stanley's Mike Wilson predicts that the price of gold will hit a low of 26 pence and calls it a “great buying opportunity”.
Even so, he acknowledged that upward risks for gold are increasing. In addition, allocations to gold could start to pick up as investors become increasingly concerned about the slowdown in economic growth as the Federal Reserve tightens its policy, he said. Do you have any confidential news? We want to hear from you. Get this in your inbox and learn more about our products and services.
Gold prices can be extremely volatile, and that means that gold is not a fully stable investment.