Gold price highs ‘are yet to come’, says UBS
Gold prices have already increased 10 per cent in 2025 to $2,900 (£2,300), but UBS has upgraded its target price for the precious metal again.
UBS analyst Joni Teves said gold has had “unprecedented market dislocations” and reached a record high in 2024, but it’s only expected to move higher in 2025.
Teves explained that the gold market is currently experiencing “deep-rooted bullish sentiment,” with the metal seen as a safe-haven asset amid a highly uncertain and volatile macro environment.
“After missing several buying opportunities in 2024, investors are likely wary of repeating the same patterns and may want to take advantage of corrections sooner this time around,” she said.
Teves added that with uncertainty regarding tariffs, worries that stagflation may rear its head again, and continued global conflicts, the ‘safe haven’ of gold is likely to benefit.
In addition, UBS expects stronger-than-expected official sector demand, such as through China’s pilot programme, which allows insurance companies to invest in gold, which provides important support to the market.
The bank’s new forecasts predict that gold will climb to $3,200 later this year, then ease down slowly, ending 2025 above $3,000.
UBS noted a continued lack of investor positioning toward the precious metal, “suggesting plenty of scope to add gold to portfolios.”
Alec Cutler, director at Orbis Investments, explained that despite the surging price of gold, Western investors have largely avoided rushing into the asset class.
“The number of iShares and SPDR ETF investors has been dropping for the last two years… meaning gold’s rally so far is being driven by central banks and Asian investors,” he told City PM.
He said that the strong returns of the Magnificent Seven, as well as the attractiveness of crypto, had been holding investors back from gold, but this would likely shift throughout the year.
Therefore, Cutler predicted that gold’s rally would accelerate further once Western investors began investing in it.
Meanwhile, the UBS analysts kept their forecasts for other precious metals, like silver and platinum, unchanged.
While the analysts said the other metals have the potential to outperform gold from their current levels, silver suffers from higher volatility and lower investor conviction, while platinum interest could “stay muted” due to liquidity issues, leaving them reluctant to shift expectations.