Gold Forecast Ubs

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Gold Forecast Ubs

Gold To Touch $5400 in 2027 - UBS

One thing that can make it difficult to forecast the gold price is higher US interest rates. Despite these complications, UBS thinks gold prices will recover to $4600 by year-end.

The 1-year target for gold set by UBS is $5400. According to UBS, the yellow metal prices will reach the target by September 2027. This easily means an upside of more than 20% from the current levels.

Gold Demand Remains Robust

This forecast comes at a time when the bank expects the central bank to raise the interest rate multiple times in the near future.

One reason behind the tighter US interest rate policy is the inflation figures. The central bank fears that any reduction in the interest rate will eventually push inflation higher.

So, the bank has little to no choice but to keep the rates higher. In fact, the bank has already raised the rates, and UBS thinks more rate hikes are coming.

Higher rates increase the opportunity cost of buying and holding gold. After all, gold is a non-yielding asset and does not generate any income.

Amidst these circumstances, UBS still thinks Gold prices will appreciate in the coming months. That's why UBS has set a target of $4600 for year-end. For March and June 2027, UBS has set a target of $5000 and $5200, respectively.

The reason why UBS is bullish on gold is very interesting. They view gold as a portfolio diversifier as well as a hedge. When we look at the macroeconomic situation and the geopolitics, this reason makes sense.

The gold demand from the central bank remains robust. The central banks continue to buy gold in an attempt to lower exposure to the US Dollar.

The bottom line is that UBS is forecasting higher rates. The reason is that people want protection against inflation as well as geopolitical risks. So, even the higher US yields won't be enough to stop gold from advancing higher.

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