Gold’s rally isn’t over yet, says UBS By Investing.com

Investing.com — UBS analysts maintain a bullish outlook for , saying the precious metal’s rally is far from over.

In a note dated Wednesday, UBS raised its gold price forecast, predicting that prices will approach $2,800 by the end of 2024 and climb to $3,000 by 2025.

This upward revision reflects continued broad demand for gold driven by various market segments and the lack of significant selling pressure.

The optimistic outlook is supported by several macroeconomic factors. According to UBS, the ongoing monetary easing, not only by the US Federal Reserve, but also by other central banks globally, will create an environment conducive to gold purchases.

As interest rates fall, the cost of holding gold falls, encouraging investors to allocate more of their portfolios to the precious metal.

Additionally, a weakening US dollar is expected to act as a tailwind for gold as investors seek alternatives to traditional currency holdings.

Geopolitical tensions and the upcoming US election add further complexity to the market, with investors looking to gold as a safe-haven amid widening fiscal deficits and rising government debt.

UBS analysts also note that while there is a strong consensus supporting higher gold prices, market positioning remains relatively weak, leaving room for new gold allocations in the coming quarters.

“We expect central banks and other official institutions to continue to add to gold reserves,” UBS said. Many central banks are diversifying their reserves due to sanctions risks and geopolitical instability, although the pace of gold purchases may slow.

Meanwhile, consumer demand for physical gold, particularly in major markets such as China and India, is expected to remain steady despite higher prices.