The UBS continues to see the gold market on the upward and adapts its forecast upwards. The bank expects a continued strength of the precious metal and refers to decisive factors.
• Gold price in rally mode
• Geopolitical tensions & Co. as a driver
• UBS raises price target
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The gold price has been on a high flight since the beginning of the year and rises from one record high to the next. During this time, the precious metal has already gained around 35.2 percent of value (as of 03.03.2025) – and experts see further upward potential.
US customs policy and geopolitical tensions
Both geopolitical tensions and the Protectionist trade policy of the US government have raised gold prices in recent weeks. Since Donald Trump took office, the growing uncertainty has repeatedly ensured increased demand for the precious metal as a safe port.
In addition, concerns about a possible withdrawal of US support for Ukraine in conflict with Russia are growing at the financial markets. The relationships between Washington and Kiev have recently received visible cracks, there was a real scandal at a press conference between Wolodymyr Selenskyj and Donald Trump in the White House.
Demand of the central banks
Another factor for the increase in the gold price is the continued demand by central banks – most recently by the Chinese central bank. Last year, the establishment of national gold reserves by various central banks had significantly influenced price development. In a study, Goldman Sachs recently increased the forecast for current demand by the central banks from 41 to an average of 50 tons per month. In addition, the US investment bank has significantly increased its gold price forecast: Now the experts expect the gold price to increase to $ 3,100 by the end of the year, instead of the previously forecast $ 2,890.
UBS raises price target for gold price
UBS also sees further upward potential for the gold price, although it has been able to grow significantly since the start of the year. “It seems that so much has already happened and it has only been February. While this mood is likely to apply to all financial markets in 2025, gold in particular experienced unprecedented market faults and record-high prices in a little more than six weeks since the beginning of the year,” said UBS strategist Joni Teves according to Investing.com. Against this background, the Swiss bank has raised its price target for the precious metal. “Our latest assessment of the market conditions causes us to update our gold assessments and correct our price forecast upwards. These changes put the climax to the second half of 2025, with gold a higher level than before,” said Teves. According to Oilprice.com, UBS is now assumed that the gold price will climb to $ 3,200 later this year before slowing down again and will be over $ 3,000 at the end of the year.
Gold asked as a “safe harbor”
According to the UBS strategist, the gold market is currently in a continuing upward trend, since the precious metal is increasingly in demand as a stable asset in uncertain and volatile economic times.
In particular, according to UBS, the geopolitical tensions, possible trade restrictions and the concern before the return of stagflation could further increase the attractiveness of gold. In addition, the bank expects a surprisingly high demand from the official sector. A decisive factor could be China’s new pilot program that enables insurers to invest in gold – a development that should support the market sustainably.
In addition, the positioning of the investors is still poor against the precious metal, “which indicates that there is a lot of scope to include gold in the portfolios,” quotes Oilprice.com to the experts. “After investors missed several purchase opportunities in 2024, they are probably careful when it comes to repeating the same patterns and may want to benefit from corrections earlier this time,” said Teves.
Editor finance.net