UBS Investment Bank remains bullish on gold, forecasting that the precious metal’s rally is set to extend into the second and third quarters of 2025. This optimistic outlook is supported by ongoing global uncertainties and an expected dovish shift in US monetary policy.
Joni Teves, UBS’s precious metals strategist, said in a virtual briefing that despite recent price volatility linked to tariff news, the long-term prospects for gold remain strong.
“Given the downside risks to growth, we expect the Federal Reserve to continue easing policy, which will create a favorable environment for gold,” Teves said.
She highlighted gold’s appeal as a safe haven amid trends like asset reallocation and de-dollarisation, urging investors to diversify their portfolios with gold.
Net long positions in Comex gold futures remain relatively low in early 2025, indicating room for further investor participation. “Gold faced pressure during Fed rate hikes, leading to cuts in gold holdings,” she added.
Teves expects short-term consolidation in gold prices, offering entry opportunities for new investors. Physical demand has already picked up across several regions this year and is expected to continue.
UBS maintains a year-end gold price forecast of US$3,500 per ounce for both 2025 and 2026, though Teves cautioned that the rally may slow by mid to late 2025.
On gold’s competition with cryptocurrencies, Teves affirmed gold’s role as a superior crisis hedge. “During geopolitical risks, gold remains the preferred safe haven, unlike cryptocurrencies, which are viewed as risk assets.”
She expects demand to be driven by a wide range of buyers, including sovereigns, private wealth managers, institutional funds, and retail investors. While jewellery demand may stay weak due to high prices, strong physical investment demand should offset this.
Teves noted upside potential from China, where bullish sentiment remains strong. However, she warned that risks include a stable tariff environment and a potential Fed hawkish shift.
