UBS Raises Gold Prices Forecast for 2024: New Target Revealed

UBS has revised its gold price forecast, now predicting the precious metal will reach $2,600 per ounce by the end of 2024, an increase from the earlier target of $2,500.

This adjustment follows gold’s record high of $2,450 per ounce on May 20, driven by growing expectations for Federal Reserve rate cuts and a weaker US dollar in light of softer economic data from the US.

The updated forecast is influenced by three main factors. Firstly, UBS points out that the weaker US data in April has led to a reassessment of the Federal Reserve’s rate cut expectations, with money markets now anticipating 40 basis points of easing in 2024, up from 28 basis points at the end of April. Lower interest rates typically encourage gold prices by attracting inflows into exchange-traded funds (ETFs).

Secondly, UBS has raised its forecast for central bank demand in 2024 to between 950 and 1,000 metric tons, compared to the previous estimate of 800 to 850 metric tons. They highlight that the World Gold Council reported record purchases of 290 metric tons in the first quarter, even with a recent slowdown in gold acquisitions by the People’s Bank of China. However, trade data from Switzerland indicates that buying activity in China remains robust.

Lastly, persistent geopolitical uncertainties—including the upcoming US elections, conflicts in the Middle East and Ukraine, and escalating US-China trade tensions—are expected to bolster gold’s appeal as a safe haven.

UBS advises investors to consider buying gold on price dips around $2,300 per ounce or lower, underscoring its importance as a long-term portfolio diversifier.

Looking to the future, UBS has also provided a forecast for the end of June 2025, suggesting gold could reach $2,700 per ounce.