Gold Prices Set to Soar: UBS Predicts $2,900 per Ounce by Q3 2025

UBS raises its gold price forecast to $2,750 per ounce by the end of 2024, citing robust investment demand, a weakening US dollar, and geopolitical concerns. The Swiss bank anticipates further rises to $2,900 by Q3 2025, driven by central bank purchases and jewelry demand.

Gold prices are expected to soar to USD 2,750 per ounce by the end of 2024, up from an earlier target of USD 2,600, according to a recent UBS report. The Swiss banking giant's upward revision comes after a remarkable 29 percent rise in gold's value this year, driven by strong investment demand, a weakening US dollar, and escalating geopolitical tensions.

UBS also forecasts gold prices will climb to USD 2,850 per ounce by mid-2025, and further to USD 2,900 by the third quarter of 2025, reflecting the bank's bullish outlook on the precious metal. The surge in prices has been bolstered by falling US real interest rates, significant central bank purchases, and a seasonal uptick in jewelry demand. Gold reached an all-time high of USD 2,670 per ounce on September 24 amid concerns about global economic growth and upcoming US elections, which historically trigger financial market uncertainty.

While UBS warned of potential short-term price consolidation following the rapid rally, it suggested that any pullbacks would likely be fleeting. According to the World Gold Council, gold has historically rallied up to 10 percent within six months after the Federal Reserve implements a rate cut. UBS believes gold's elevated starting point offers scope for further gains, particularly with accelerating ETF demand.

Despite indications of slowing Chinese demand, UBS attributes this to the exhaustion of the country's import quota rather than a drop in underlying demand from local investors. The bank continues to advocate for gold as a strategic hedge within a diversified USD-denominated portfolio, recommending a 5 percent allocation to the metal. Additionally, UBS considers gold miners attractive investment opportunities, although it views them as more tactical plays given the current market conditions.