UBS Raises Gold Price Forecasts: Analysts Anticipate Continued Surge in Precious Metal Prices
In a bold move, UBS has increased its gold price predictions, foreseeing significant gains in the precious metal market in the coming months. According to the renowned bank, gold is expected to soar to $2,750 per ounce by the end of 2024, surpassing its previous forecast of $2,600.
By mid-2025, UBS projects gold prices to climb even higher to $2,850 per ounce, with further growth expected to reach $2,900 per ounce by the third quarter of 2025. The bank highlighted that gold has already surged by an impressive 29% this year, continuously setting new records.
On September 24, gold reached an all-time high of $2,670 per ounce, driven by concerns surrounding economic growth, geopolitical tensions, and a weakening U.S. dollar. UBS noted that gold has already surpassed this level, indicating a strong upward trend.
Historically, gold tends to rally up to 10% in the six months following the first Federal Reserve rate cut. Given the current momentum, UBS analysts believe that even more gains are on the horizon in the next 6-12 months. Factors contributing to this bullish outlook include increased investment demand, declining U.S. real rates, a seasonal upturn in jewelry consumption, and ongoing central bank purchases.
Despite occasional pullbacks, UBS emphasized that corrections in gold prices have been minimal and short-lived, prompting investors to chase the market higher. With the upcoming U.S. election adding to market uncertainty, demand for gold as a safe haven asset is expected to rise.
UBS also addressed concerns regarding slower demand from China, attributing it to quota restrictions rather than a fundamental decrease in buying interest. The bank continues to advocate for a 5% allocation to gold within a diversified USD portfolio, citing the metal's hedging properties. Furthermore, UBS sees potential in selected gold mining companies as a strategic investment opportunity.
In conclusion, the surge in gold prices is not just a temporary trend but a sustained rally with multiple supportive factors. Investors should consider diversifying their portfolios by allocating a portion to gold, especially in the current economic climate of uncertainty and volatility. Stay informed and seize the opportunities presented by the evolving gold market.