Investing.com — UBS has raised its gold price forecasts, anticipating further gains for the precious metal in the coming year.
The bank now expects gold to reach $2,750 per ounce by the end of 2024, up from its previous forecast of $2,600.
UBS expects prices to rise further to $2,850 per ounce by mid-2025, and to $2,900 per ounce in the third quarter of 2025.
This year, gold is up 29%, continuing to break records, according to UBS.
On September 24, the metal hit a record high of $2,670 an ounce, driven by concerns about economic growth, geopolitical tensions and a weakening US dollar. That level has been broken today.
UBS pointed out that historically, gold has tended to rise 10% in the six months following the Federal Reserve’s first rate cut, and the metal’s current upward momentum suggests even more gains are likely.
“We see even higher prices over the next six to 12 months, driven by stronger investment demand alongside a decline in US real interest rates, a seasonal recovery in jewelry consumption and continued central bank purchasing,” UBS analysts said.
The bank also mentioned that despite the rapid price increases, pullbacks this year were “shallow and short-lived,” forcing investors to drive the market higher.
With the US elections approaching, UBS sees uncertainty increasing, which could further fuel demand for gold as a safe haven.
Furthermore, the bank noted that while Swiss gold export data indicates slower demand from China, this is likely due to quota restrictions rather than a decline in underlying demand.
UBS continues to recommend a 5% allocation to gold within a balanced USD portfolio, citing the metal’s hedging qualities. It also expressed a positive view of select gold miners as a tactical investment opportunity.
