UBS has raised its gold price forecast to a mildly underwhelming $3,000 per ounce, citing rising investor demand, central bank buying, and global uncertainty.
This follows the yellow metal hitting a new all-time high of $2,870 per ounce, driven by concerns over tariffs, geopolitical tensions, and expectations of lower interest rates.
Gold has surged more than 10% since mid-December, when the US Federal Reserve signalled it would slow interest rate cuts. Lower rates reduce the opportunity cost of holding gold, making it more attractive to investors.
Central banks have also played a key role in gold’s rally.
The World Gold Council reported that global central bank purchases reached 1,045 metric tons in 2024, matching record levels from previous years.
UBS believes this demand will continue as countries seek to diversify away from the US dollar.
Meanwhile, trade tensions remain high. The US has raised tariffs on Chinese imports, while uncertainty surrounding relations with Canada and Mexico lingers.
Political instability, including ongoing conflicts in Ukraine and the Middle East, has further bolstered gold’s appeal as a safe-haven asset.
With continued uncertainty and expectations of further interest rate cuts, UBS sees gold as a valuable hedge against market volatility in 2025.
