UBS Increases Gold Price Forecast

UBS has updated its gold price forecasts, predicting further appreciation of the precious metal over the coming year. The bank now expects gold prices to reach $2,750 per ounce by the end of 2024, an increase from its earlier estimate of $2,600.

By mid-2025, UBS anticipates prices could rise to $2,850 per ounce, with projections of $2,900 per ounce by the third quarter of 2025. This year, gold has already surged by 29%, setting new records along the way.

On September 24, gold reached an all-time high of $2,670 per ounce, influenced by concerns about economic growth, geopolitical tensions, and a declining U.S. dollar. It has since surpassed that level.

Historically, gold rallies by as much as 10% in the six months following the first rate cut by the Federal Reserve, and current market trends suggest even greater increases are possible. UBS analysts noted that they expect ongoing investment demand, a reduction in U.S. real interest rates, a seasonal uptick in jewelry consumption, and persistent central bank purchases to drive prices higher in the next 6 to 12 months.

The bank highlighted that despite the sharp rise in gold prices, pullbacks have been relatively short-lived, compelling investors to follow the upward trend. With the upcoming U.S. election, UBS anticipates heightened uncertainty that could further boost interest in gold as a safe haven asset.

Additionally, while Swiss gold export data indicates a slowdown in demand from China, UBS attributes this to quota restrictions rather than a decrease in underlying demand.

UBS continues to recommend a 5% allocation to gold within a balanced portfolio, underscoring the metal’s hedging properties. They also hold a favorable outlook on select gold mining stocks as a tactical investment opportunity.