UBS forecasts extended gold boom through mid-2026.
UBS has raised its 2026 mid-year gold target price to $4,500/oz – up from $4,200 previously – on Fed rate cut expectations, persistent geopolitical risks, fiscal concerns and strong demand from central banks and ETF investors.
“We expect gold demand to rise further in 2026, influenced by anticipated Fed rate cuts, lower real yields, continued geopolitical uncertainties, and changes in the domestic US policy environment,” UBS wrote in a note on Thursday.
The bank also raised its upside target for gold by $200 to $4,900 per ounce on a possible spike of political and financial risks, but maintained its downside case at $3,700 per ounce.
UBS analysts said the worsening U.S. fiscal outlook will likely support central bank and investor gold purchases and they expect demand for exchange-traded funds (ETF) to remain strong in 2026.
On the other hand, they warned that potential Fed hawkishness and the risk of central bank gold sales remained key challenges to their bullish outlook.
On Nov. 3, UBS analysts said the current pullback in the gold market is only temporary, and they see an upside scenario of intensifying geopolitical or market risks that could drive the yellow metal’s price as high as $4,700.
The Swiss banking giant noted that “fading price momentum triggered a second leg down in futures open interest,” but they emphasized that underlying demand remains strong.
UBS analysts also cited the World Gold Council’s Q3 Gold Demand Trends report, which confirmed “very strong and accelerating buying” from both central banks and individual investors.
“Central bank purchases of 634 metric tons this year have been slower than last year’s pace but are picking up in Q4, in line with our forecast of 900–950 metric tons for 2025,” they wrote.
ETF inflows of 222 metric tons and bar and coin demand above 300 metric tons for the fourth consecutive quarter demonstrate that investor appetite has also strengthened. “Jewellery demand was also not as weak as feared,” UBS noted.
Source: kitco