CNN Business: Gold Gets a Boost. Nothing Like Uncertainty to Send Investors Scrambling

Article by Julia Horowitz in CNN Business

In a moment of uncertainty for investors, safe haven assets are getting a boost. That's been good news for gold.

Earlier this week, gold rallied to a brief high of $1,555 a troy ounce. That level was last seen in April 2013, before prices collapsed as much as 15% in a matter of days, according to a recent report from UBS strategist Joni Teves.

Gold has tempered its rise slightly in recent days, and is currently near $1,551, looking at futures contracts for December. But Teves thinks the outlook remains strong. "Persistent uncertainty is likely to keep gold well supported," she said. At this point, she noted, there's a "relatively high threshold for easing investor concerns" about trade. Falling bond yields also make gold look more attractive.

So, how high could the metal go? Teves said gold could move as high as $1,600 between now and the end of the year, though it might make a "pit stop" at $1,580.

Global backdrop: The 2-year and 10-year yield curve remains inverted, historically a precursor to a recession. That's raising fears about whether investors should really be piling into riskier assets like stocks.

From Morgan Stanley, in a note Wednesday morning: "The US yield curve has become the most inverted in 12 years. ... We expect risk appetite to ease from here."

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