UBS has raised its forecast for the gold price, expecting the precious metal to reach $2,600 per ounce by the end of 2024, up from its previous target of $2,500 per ounce.
The new forecast comes after gold hit a record high of $2,450 an ounce on May 20, driven by increased expectations for Federal Reserve rate cuts and a weakening U.S. dollar amid softer U.S. economic data.
The revised forecast reflects three key factors. First, UBS says softer US data in April led to a repricing of Federal Reserve expectations for rate cutswith money markets now Prices in 40 basis points of easing in 2024, up from 28 basis points at the end of April.
Lower interest rates tend to boost gold prices by encouraging inflows into exchange-traded fund (ETF) funds.
Second, UBS has increased central bank demand forecasts for 2024 to 950–1,000 tonnes, an increase from 800–850 tonnes. They note that the World Gold Council reported record first-quarter purchases of 290 metric tons, despite the recent moderation in gold purchases by the People’s Bank of China. However, Swiss trade data indicates continued strong buying in China.
Third, ongoing geopolitical uncertainties, including the looming US elections, conflicts in the Middle East and Ukraine, and heightened trade tensions between the US and China, are expected to support gold as a hedge.
UBS recommends buying gold on dips around $2,300 per ounce or less, highlighting its role in long-term portfolio diversification.
Looking further ahead, UBS also introduced a forecast of $2,700 per ounce in late June 2025.
