UBS Predicts Gold Price Rise, Rate Cuts
UBS, a Swiss financial services company present in over 50 countries, has made a bullish prediction for gold in 2024. According to UBS analysts, they foresee a 10% increase in gold prices over the current market prices. This forecast is based on the expected policy pivot of the U.S. Federal Reserve, which is anticipated to begin cutting interest rates as early as May.
Factors Driving the Gold Price Increase
UBS expects gold to potentially reach $2250 per ounce this year due to various factors that could drive the demand for the precious metal. One significant factor is the possibility of a U.S. Federal Reserve interest rate cut. This move could stimulate interest in the gold markets and contribute to the predicted price rise.
According to UBS, it is crucial not to underestimate the impact of the Federal Reserve's policy pivot. While the exact timing of the interest rate cuts is still uncertain, UBS predicts a 100 basis points rate cut as early as May. This potential rate cut would put pressure on the U.S. dollar and real interest rates, subsequently sparking fresh demand, especially from exchange-traded gold funds.
Gold as a Hedging and Diversification Instrument
UBS concludes that the ongoing macro and elevated geopolitical risks support the rationale for holding gold as a hedge and for diversification purposes. The precious metal is traditionally considered a crisis hedge due to its lack of credit risk and its negative correlation to risk assets. This makes it an attractive asset during times of uncertainty and market volatility.
According to Johan Palmberg, an analyst at the World Gold Council (WGC), the current environment justifies maintaining exposure to gold for hedging and diversification purposes.
Share Your Thoughts
What are your thoughts on UBS's prediction about gold prices in 2024? Do you believe that the expected policy pivot of the U.S. Federal Reserve will indeed lead to a 10% increase in gold prices? Share your opinion in the comments section below.
Frequently Asked Questions
What precious metals can you invest in for retirement?
The best precious metal investments are gold and silver. They are both simple to purchase and sell, and they have been around for a long time. Consider adding them to the list if you're looking to diversify and expand your portfolio.
Gold: Gold is one of man's oldest forms of currency. It's stable and safe. It's a great way to protect wealth in times of uncertainty.
Silver: Silver is a popular investment choice. This is a great choice for people who want to avoid volatility. Silver is more volatile than gold. It tends to rise rather than fall.
Platinium: Another form of precious metal is platinum, which is becoming more popular. It's resistant to corrosion and durable, similar to gold and silver. It's however much more costly than any of its counterparts.
Rhodium – Rhodium is used to make catalytic conversions. It is also used as a jewelry material. And, it's relatively cheap compared to other types of precious metals.
Palladium: Palladium, which is a form of platinum, is less common than platinum. It's also less expensive. This is why it has become a favourite among investors looking for precious metals.
How much of your portfolio should be in precious metals?
This question can only be answered if we first know what precious metals are. Precious metals refer to elements with a very high value relative other commodities. They are therefore very attractive for investment and trading. Gold is by far the most common precious metal traded today.
There are also many other precious metals such as platinum and silver. The price of gold tends to fluctuate but generally stays at a reasonably stable level during periods of economic turmoil. It is also not affected by inflation and depression.
In general, prices for precious metals tend increase with the overall marketplace. But they don't always move in tandem with one another. If the economy is struggling, the gold price tends to rise, while the prices for other precious metals tends to fall. This is because investors expect lower interest rates, making bonds less attractive investments.
When the economy is healthy, however, the opposite effect occurs. Investors want safe assets such Treasury Bonds and are less inclined to demand precious metals. These precious metals are rare and become more costly.
To maximize your profits when investing in precious metals, diversify across different precious metals. It is also a good idea to diversify your investments in precious metals, as prices tend to fluctuate.
How much do gold IRA fees cost?
Six dollars per month is the fee for an Individual Retirement Account (IRA). This includes the account maintenance fees and any investment costs associated with your chosen investments.
If you wish to diversify your portfolio, you may need to pay additional fees. These fees will vary depending upon the type of IRA chosen. Some companies offer free checking, but charge monthly fees for IRAs.
Most providers also charge annual management costs. These fees are usually between 0% and 1%. The average rate is.25% each year. These rates can often be waived if a broker, such as TD Ameritrade, is involved.
What should I pay into my Roth IRA
Roth IRAs are retirement accounts where you deposit your own money tax-free. You can't withdraw money from these accounts before you reach the age of 59 1/2. You must adhere to certain rules if you are going to withdraw any of your contributions prior. First, your principal (the deposit amount originally made) is not transferable. No matter how much money you contribute, you cannot take out more than was originally deposited to the account. If you decide to withdraw more money than what you contributed initially, you will need to pay taxes.
The second rule is that you cannot withdraw your earnings without paying income taxes. Withdrawing your earnings will result in you paying taxes. For example, let's say that you contribute $5,000 to your Roth IRA every year. Let's further assume you earn $10,000 annually after contributing. The federal income tax on your earnings would amount to $3,500. This leaves you with $6,500 remaining. Since you're limited to taking out only what you initially contributed, that's all you could take out.
Therefore, even if you take $4,000 out of your earnings you still owe taxes on $1,500. Additionally, half of your earnings would be lost because they will be taxed at 50% (half the 40%). So even though you received $7,000 in Roth IRA contributions, you only received $4,000.
There are two types if Roth IRAs: Roth and Traditional. Traditional IRAs allow for pre-tax deductions from your taxable earnings. Your traditional IRA can be used to withdraw your balance and interest when you are retired. There is no limit on how much you can withdraw from a traditional IRA.
A Roth IRA doesn't allow you to deduct your contributions. However, once you retire, you can withdraw your entire contribution plus accrued interest. There is no minimum withdrawal limit, unlike traditional IRAs. Your contribution can be withdrawn at any age, not just when you reach 70 1/2.
Statistics
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
External Links
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 1991 – WSJ
- You want to keep gold in your IRA at home? It's not exactly legal – WSJ
cftc.gov
law.cornell.edu
- 7 U.S. Code SS7 – Designation of boards for trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement funds
forbes.com
- Gold IRA, Add Sparkle to Your Retirement Nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
How To
How to keep physical gold in an IRA
The easiest way to invest is to buy shares in companies that make gold. But, this approach comes with risks. These companies may not survive the next few years. If they survive, there's still the risk of losing money due to fluctuations in the price of gold.
Alternative options include buying physical gold. You can either open an account with a bank, online bullion dealer, or buy gold directly from a seller you trust. This option is convenient because you can access your gold when it's low and doesn't require you to deal with stock brokers. It's easier to track how much gold is in your possession. You will receive a receipt detailing exactly what you paid. There's also less chance of theft than investing in stocks.
There are however some disadvantages. There are some disadvantages, such as the inability to take advantage of investment funds and interest rates from banks. You won't have the ability to diversify your holdings; you will be stuck with what you purchased. Finally, the taxman might want to know where your gold has been placed!
If you'd like to learn more about buying gold in an IRA, visit the website of BullionVault.com today!
—————————————————————————————————————————————————————————————–
By: Sergio Goschenko
Title: UBS Predicts Gold Prices Will Rise 10% in 2024 Amidst Fed Policy Pivot
Sourced From: news.bitcoin.com/ubs-predicts-gold-prices-will-rise-10-in-2024-amidst-fed-policy-pivot/
Published Date: Wed, 24 Jan 2024 06:30:16 +0000
Related posts:
UBS Offers Wealthy Clients Access to Crypto ETFs in Hong Kong
Bitwise Unveils 10 Crypto Predictions for 2024: Bitcoin to Surpass $80,000, Spot Bitcoin ETFs Could Capture $72 Billion
7 Best Gold IRA Companies 2023 (Ranked by customer reviews)
Coinbase Report Predicts Impact of 2024 Bitcoin Halving and Ethereum’s Cancun Upgrade
