Last week, gold bounced back after testing previous lows. It climbed back above the $1,900-per-ounce level, closing the week at $1,907.60 per ounce (see the following chart).

With the U.S. presidential election just five weeks away, another unexpected development hit with Friday’s announcement that President Trump had tested positive for the coronavirus and was being admitted to the hospital for treatment and observation. This adds even more uncertainty to an already tense and volatile election.

Forbes reports that despite the recent decline in gold prices, UBS advised its clients “that the recent pullback was just a temporary correction and that gold is set to rally higher going into the election. …

“‘A contested [election] outcome is still a possibility, which could add to further volatility and result in safe-haven flows,’ UBS chief investment officer of global wealth management Mark Haefele told clients in a recent note.

“The firm said that because of a ‘far-from-certain’ election outcome, clients should buy gold, a traditional safe-haven asset that tends to perform well during times of economic uncertainty.”

Rick Andrews is president of Avant Capital Management.