UBS raised its gold price forecast on Friday, lifting its target by $300 to $3,800 per ounce by the end of 2025 and by $200 to $3,900 by mid-2026. The Swiss bank cited expected Federal Reserve easing, U.S. dollar weakness from rate cuts, and ongoing geopolitical risks as the main drivers.
UBS also revised its outlook for gold exchange-traded fund (ETF) holdings, predicting they will surpass 3,900 metric tons by late 2025, nearing the record high of 3,915 tons set in October 2020.
“We maintain an Attractive view on gold and remain long in our global asset allocation. Our analysis suggests a mid-single-digit portfolio allocation to gold is optimal,” UBS wrote in its note.
The bank emphasized that geopolitical tensions, policy differences between the U.S. administration and the Federal Reserve, and President Donald Trump’s support for lower interest rates are strengthening gold’s appeal.
UBS expects central bank demand for gold to stay strong at 900–950 tons this year, only slightly below last year’s near-record purchases of just above 1,000 tons.
However, the bank also warned of risks: “The key threat for gold would be if the Fed is forced to hike rates due to stronger-than-expected inflation.”
Gold, a traditional safe-haven asset in times of economic and political uncertainty, has surged this year. It hit a record high of $3,673.95 on Tuesday and has gained more than 39% year-to-date, benefiting from the global shift toward lower interest rates.
