UBS “see gold as an attractive geopolitical hedge and portfolio diversifier, and rate the metal as most preferred.”
The comments is from a note that makes three central points. In brief:
Supportive Backdrop for Global Equities
- Expect market volatility to continue in the lead up to the US presidential election in November.
- Political turbulence in France.
- Smaller mandate for India’s Prime Minister Narendra Modi after the election.
1. We continue to see a supportive backdrop for global equities, especially as we expect market volatility to continue in the lead up to the US presidential election in November, along with political turbulence in France and a potentially smaller mandate for India’s Prime Minister Narendra Modi after the election. This creates opportunities for investors to navigate through the uncertainties and find value in specific sectors.
Investing in AI
2. We think investors should make sure they’re sufficiently invested in AI, with a tactical tilt to the enabling layer of the technology’s value chain and megacaps. Artificial Intelligence (AI) is a rapidly growing sector with immense potential for generating returns, and aligning investments with the underlying technology can lead to long-term growth and profitability.
Geopolitical Hedge with Gold
3. Political uncertainty remains a key concern for investors, leading UBS to highlight gold as an attractive geopolitical hedge and portfolio diversifier. Amidst geopolitical tensions and economic uncertainties, gold is seen as a safe haven asset that can provide stability and protection against market volatility. UBS rates gold as the most preferred metal, emphasizing its role in diversifying portfolios and mitigating geopolitical risks.
Additional Insight:
In periods of political uncertainty and market volatility, traditional safe-haven assets like gold tend to perform well as investors seek stability and protection for their portfolios. Gold has historically been a reliable hedge against geopolitical risks and economic downturns, making it a valuable asset for investors looking to diversify their holdings and safeguard against turbulent times. By including gold in a well-balanced investment strategy, investors can enhance the resilience of their portfolio and potentially achieve long-term growth even in challenging market conditions.
