UBS reaffirmed its one-month gold price target of $1,950 per ounce

The gold price climbed 2.4% Wednesday morning to $1,832 per ounce on the back of expectations that the weakening economy would prompt the Federal Reserve to initiate more monetary stimulus. After trading as low as $1,783 early Tuesday, the price of gold soared following a CNBC interview with Chicago Fed President Charles Evans. The dovish voting member of the Federal Open Market Committee told CNBC’s Steve Liesman, “the data has been soft” and noted that he “would favor more accommodation.”

In light of last week’s plunge and subsequent rebound in gold, UBS wrote in a note to clients that “the mood among gold investors appears to be to buy the dip rather than chase the market, which is understandable given last week’s volatility.”

The firm went on to say that the “violent sell-off hasn’t done any lasting damage to gold, and the reasons investors bought gold in recent months remain valid.”

As a result, UBS reaffirmed its one-month gold price target of $1,950 per ounce and its three-month forecast of $2,100 per ounce.