Buy the gold dip, that’s the message from analysts at UBS as the recent pullback was highlighted as a buying opportunity.
It comes after a record high of around $3,168 from early in April receded by some $200, despite the precious metal's safe haven attraction amidst the volatility around the US tariff announcements.
UBS attributed the dip to profit-taking, liquidity-driven selling linked to equity declines, and relief from gold being excluded from new tariffs.
Support is expected below the $3,000 level, according to UBS, where analysts also note the upcoming seasonal demand in India and restocking needs in China, which could both help support gold prices.
Physical demand in China appears to be increasing, with Shanghai Gold Exchange premiums and trading volumes both hitting multi-month highs, the Swiss bank said.
“Our recent trip to China revealed very strong bullish sentiment onshore, as gold is seen to be a good alternative asset to hold against uncertainty around the economy, currency and other asset classes,” analysts explained.