MUMBAI: Analysts at the Swiss brokerage UBS have revised upwards its forecast on gold prices, with the latest outlook pegging the yellow metal, which has made over two dozen new highs this year so far, including crossing the sensitive $3,500/ounce-mark late April, to $3,700 for an ounce by June next. The third upward revision in this year comes due to the lingering macroeconomic risks in the US, de-dollarization drive and strong demand from central banks and exchange-traded fund.
Gold, which has never ceased to be the safe-haven asset so far, has gained 28% so far this year becoming one of the top- performing major asset classes. The precious metal has scaled 27 new all-time highs between January and June 2025 in global markets—including twice crossing the sensitive Rs 1 lakh/10 grams mark in the domestic markets when the metal crossed $3,500/ounce-mark in the third week of April. This 26 new life-time highs came in after breaking through a 40-new-record streaks in 2024 when it had rallied 24% over a 22% rally in the previous year.
According to UBS, with over 28% surge so far this year, gold has already outperformed other asset classes including stocks, bonds and even Bitcoin, and it expects this upward trend to continue, though with some potential easing towards the end of 2026 or early 2027.
“We see US-related macro-risks, concerns about fiscal sustainability and geopolitics driving de-dollarization and central bank purchases driving gold prices higher,” its analysts said, adding “accordingly our new forecast are: end-March 2026 target at $3,600/ounce (earlier $3,500) and end-June 2026 target to $3,700/ounce (earlier $3,500), and also introducing a new September 2026 target of $3,700. But we maintain our end-2025 target at $3,500/oz.”
UBS has also increased its forecast for the full year ETF gold demand to almost 600 tonnes from 450 tonnes, citing the World Gold Council figures showing the strongest inflows into 2025's first half since 2010.
Central bank purchases are expected to remain strong, although slightly lower than last year's record-breaking purchases. UBS said that they now expect global gold demand to rise by 3% in 2025 to 4,760 mt, the highest level seen since 2011.
“Despite the dialing back of some trade frictions, we see US macro-related risks, questions over Federal Reserve independence, worries about fiscal sustainability, and geopolitics underpinning de-dollarization trends and more central bank buying," UBS said in a note.
"In our view, these factors will drive gold prices even higher," analysts said, adding the key risk for gold is if the Fed is forced to raise rates.
The Fed chair Powell is expected to stay hawkish at the Jackson Hole summit underway, and markets are currently expecting three cuts in 2025.
The Trump administration tariff war talks from April had pushed the price of an ounce/28.35 grams of gold to top the unchartered territory of $3,500 in the last week of April. Since then it has been on a southward-ho and was trading $3,372, up $13 an ounce on the Chicago Mercantile Exchange in early trade today.
This is the third time UBS has revised its price target upwards—first to $3300 in March and then in April to $3500.
Its Wall Street peer Goldman Sachs also has its price target at $3,700 for the metal by December 2026.
UBS has raised its gold price forecasts for the end of March 2026 to $3,600 per ounce, which was previously $3,500, and for the end of June 2026 to $3,700 per ounce which was also previously $3,500.
Citing the key drivers for the upward revision, its analysts said the surging price is driven by several factors such as the continuing rise in the risks arising from the American trade war and the resultant risk to its growth, inflation and thus inflation outcomes in the world’s largest economy.
“Concerns about inflation due to the trade war driven price rises, and the resultant Federal Reserve policy, and the overall economic outlook in the US are supporting gold's appeal as a safe-haven asset,” UBS said.
Another reason is the increasing de-dollarization along with geopolitical risks. Concerns about the US dollar are prompting a shift away from the greenback, with central banks and other institutions looking to diversify their reserves by increasing their gold holdings.
Another demand driver the continuing demand coming in from both central banks and ETFs, and the brokerage expects this trend to continue.
The brokerage believes that a combination of sticky US inflation, a below-trend Federal Reserve, continued dollar weakness, and a likely easing in policy will support gold prices.