UBS has raised its gold price forecast to $2,500 per ounce by the end of September 2024, $2,600 by end-2024, and $2,700 by end-June 2025, following gold’s surge to an all-time high of $2,450 on May 20. The Swiss investment bank’s Chief Investment Officer (CIO) team outlined three key drivers behind the upgrade in a note released on Thursday.
Three Key Drivers
First, softer U.S. economic data in April led to a reassessment of Federal Reserve rate cut expectations. Money markets now price in approximately 40 basis points of easing in 2024, up from 28 basis points at the end of April. Lower interest rates typically boost exchange-traded fund (ETF) inflows, which in turn support gold demand.
Second, the bank revised its 2024 central bank gold demand forecast significantly higher, from 800–850 metric tons to 950–1,000 metric tons. First-quarter data already showed a record 290 metric tons of purchases. Although the People’s Bank of China has slowed its buying recently, Swiss trade data suggest continued strong demand from Chinese entities.
Third, ongoing geopolitical uncertainties—including the U.S. presidential election, conflicts in the Middle East and Ukraine, and elevated U.S.-China trade tensions—are expected to sustain gold’s safe-haven appeal.
Market Implications
UBS’s revised outlook aligns with a broader bullish consensus among major banks. Goldman Sachs and JPMorgan have also raised their gold price targets. Analysts note that gold’s role as a portfolio hedge is intensifying amid macroeconomic uncertainty. Investors will closely monitor U.S. inflation data and Fed meetings for confirmation of the anticipated rate-cutting cycle.