UBS Advises Clients to Sell Downside Protection in Gold and Silver Amid Geopolitical Volatility Gold and silver remain supported despite heightened geopolitical tensions, with UBS recommending investors sell downside protection in both metals as the bank anticipes limited risk of prices falling below key levels in the near term. The bank’s strategy focuses on capitalizing on elevated market volatility, which has created opportunities in the options market. The recommendation comes amid a turbulent environment for precious metals, driven by the escalation of the U.S./Israel-Iran conflict, which has unsettled global markets and pushed investors toward safe-haven assets. UBS reiterated a bullish outlook for gold, citing macroeconomic factors such as expectations of lower interest rates, a weaker dollar, and continued demand from central banks. The bank targets a price of USD 6,200 per ounce over the coming months. Rather than positioning for a decline, UBS prefers strategies that benefit from prices remaining above certain thresholds. The bank suggests selling downside protection for gold below USD 4,700 per ounce over the next month, reflecting confidence that the metal is unlikely to fall below that level. Selling downside protection typically involves put options, allowing investors to collect premium income while betting prices will stay above a specific threshold. A similar outlook applies to silver, with UBS noting that fundamental drivers for higher prices remain intact. The bank highlights factors such as lower nominal and real interest rates, global debt concerns, USD debasement considerations, and expectations of robust economic growth in 2026. Volatility in silver markets has surged, with option volatility reaching around 70%, creating attractive conditions for options-based strategies.#silver #gold #ubs #us_israel_iran_conflict #options_market
