Gold maintained its recent strong run, adding US$7 to US$1,266 an ounce as doubts resurfaced over equity markets.
The metal has added 20% this year and UBS believes the underlying reasons for gold's rally this year are valid and gold's gains are well-deserved.
"The macro picture has deteriorated. The probability of a US recession this year has ticked higher to 23% vs 16.5% previously.
"And while a 2017 recession in the US is not the base case, this could become a risk should threats of Yuan devaluation, lower oil prices and tighter Fed policy prevail this year.
“In view of that, gold is rightly reflecting current shifts in the macro landscape – the reassessment of investor outlooks and sentiment.”
Spot silver rose lightly to US$15.61 an ounce.
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