Gold Investment Gains Momentum Amid Economic Uncertainties

Gold Investment Gains Momentum Amid Economic Uncertainties

Luisa Santos
2 min read

Gold Gains Favor as Schroders and UBS Champion it Against Fiscal Risks

Gold is emerging as a lucrative investment, backed by major industry players Schroders and UBS Global Wealth Management. They view gold as a secure hedge against US fiscal uncertainties, geopolitical tensions, and inflation. Currently valued at approximately $2,327 per ounce, gold is anticipated to reach $2,700 in the coming year, bolstered by extensive acquisitions by central banks.

The rationale behind this positive forecast is unmistakable. The escalating US budget deficit, coupled with heightened expenditure and tax reductions in recent periods, has created an unstable fiscal backdrop. Consequently, investors are seeking safer alternatives, driven in part by the volatility of Treasuries.

Central banks are also fueling the upsurge in gold investments. They are acquiring gold as a precaution against potential challenges associated with the US dollar, especially in light of recent geopolitical maneuvers. A report from the World Gold Council revealed that around 20 central banks are gearing up to amplify their gold reserves.

Key Takeaways

  • Schroders and UBS advocate for gold as a safeguard against US fiscal risks, geopolitical tensions, and inflation.
  • Gold prices have soared to $2,327 per ounce and are projected to breach the $2,700 mark in the upcoming year.
  • Central banks are augmenting their gold acquisitions, influenced by geopolitical tension and the dollar's manipulation.
  • Escalating US budget deficits and the unpredictable nature of Treasuries are propelling investors towards gold for enhanced diversification.
  • Fixed income remains valuable for its yields, amid the challenging fiscal and inflationary environment.


The upswing in gold investments, buoyed by the endorsements from Schroders and UBS, mirrors mounting apprehensions regarding US fiscal stability and geopolitical tensions. The amplified gold purchases by central banks signify a strategic shift away from the US dollar. This trend, driven by US budget deficits and Treasury instability, underscores a broader diversification strategy within the investor community. In the short run, the surge in gold prices benefits miners and commodity traders, while its long-term implications lie in stabilizing portfolios against fiscal and geopolitical hazards, potentially reshaping global financial strategies.

Did You Know?

  • Schroders and UBS Global Wealth Management:
    • Schroders, a prominent British multinational asset management firm, holds a substantial presence in global financial markets. UBS Global Wealth Management, a division of the Swiss multinational investment bank and financial services company UBS Group AG, specializes in delivering wealth management services to high-net-worth individuals and families. Both entities are well-regarded for their prowess in financial advisory and asset management, contributing to the significant influence of their endorsement of gold within the investment realm.
  • US Fiscal Risks:
    • US fiscal risks encompass potential financial instability or challenges that the United States government may encounter due to its budgetary practices. This includes apprehensions regarding national debt, budget shortfalls, and the sustainability of governmental spending and taxation policies. These risks hold the potential to impact investor confidence and market stability, leading to heightened demand for safe-haven assets like gold.
  • World Gold Council:
    • The World Gold Council serves as a market development organization for the gold industry, aiming to stimulate and sustain demand for gold, provide industry leadership, and serve as the global authority on the gold market. The Council supports its members, primarily mining companies, through diverse initiatives and research, influencing gold market trends and investment strategies. Its reports carry significant weight as authoritative sources on gold market dynamics and are frequently cited by investors and financial institutions.

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