gold prices have remained resilient in recent weeks in the face of broad market volatility decoupling somewhat from its typical price drivers bond yields and the dollar even as 10year treasury yields and the us dollar index rose from intrayear lows toward the end of january the precious metal held above 1800 per troy ounce as of friday afternoon spot gold was still trading around that 1800oz marker despite the challenging macro backdrop of supply chain issues surging inflation and lingering pandemic risks bank of america strategists have noted that some of the investment flows into gold have been very resilient there are significant dislocations buried beneath headline inflation interest rates and currency moves raising the appeal of holding the yellow metal in a portfolio and supporting our 1925oz average gold price forecast for 2022 bofa analysts said in a research note at the end of january also central to golds resilience according to ubs is a combination of elevated demand for portfolio hedges and a belief either that the federal reserve stays behind the curve on tackling inflation or overtightens causing growth to falter in a note friday ubs chief investment office strategists highlighted that golds triedandtested insurance characteristics had again shone through versus other common portfolio diversifiers including digital assets such as bitcoin on the one hand its overall stability in the face of a hawkish pivot by the fed money market participants shift to aggressively price numerous us rate hikes in 2022 and higher us real rate proxies like us 10year tips bonds has surprised some the note said but alternatively the yellow metals resilience is broadly in line with our estimate generated by our fairvalue model currently it indicates a value of around usd 1750oz which is a modest usd 50oz discount to spot ubs models indicate that higher market volatility so far this year as signaled by the vix index is a key support pillar for gold prices for example if we plug in the longerterm average value of the vix at 195 all else equal this would signal a gold price of around usd 1575oz hence as we have argued in 1q22 elevated demand for portfolio hedges is supportive of our forecast of usd 1800oz said ubs strategists wayne gordon giovanni staunovo and dominic schnider however ubs maintains its expectation for gold to fall to the 16501700oz range in the second half of 2022 the swiss lenders house view anticipates risk sentiment will improve as the dual threats of the omicron covid19 variant and inflation ease we recommend clients to reduce tactical allocations and protect the downside of strategic holdings they added in order for gold to break further above the 1800oz mark markets may need to lose a little faith in central bank policy tightening plans according to russ mould investment director at british stockbroking platform aj bell in a note tuesday mould suggested that this could happen if the economy tips into recession as the combination of global debts and higher interest rates proves too much and policy makers have to return to cutting borrowing costs and adding to qe quantitative easing well before inflation is reined in