UBS: Dollar fluctuation increases gold's attractiveness

According to a report by Jin10 on May 16, UBS stated that recent fluctuations in the financial markets have increased the appeal of gold, as global funds are looking to move money out of the U.S. or hedge their risk exposure in the U.S. “Fluctuations in U.S. risk assets and the dollar will lead more international investors to consider hedging more dollar exposure and diversifying asset allocation globally,” said Mark Haefele, Chief Investment Officer of UBS Wealth Management. “Gold remains an important diversification investment vehicle.” Although gold has retreated from its record high of over $3500 in April, the uncertainty surrounding U.S. tariff policies and the risk of imposing high tariffs again have raised questions about the dollar’s status as the world’s dominant currency. Haefele noted that investors need to diversify their investments and hedge operations “to enhance the certainty of asset value, especially in cases of non-dollar debt maturity.” “These trends do not need a dramatic change in American exceptionalism to become apparent.”