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UBS raises gold price target to $3 800/oz by end-2025

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Photo by Reuters

12th September 2025

By: Reuters

  

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UBS raised on Friday its gold price forecast by $300 to $3 800 per ounce by the end of 2025 and by $200 to $3 900 by mid-2026, citing anticipated Federal Reserve easing and dollar weakness linked to rate cuts and geopolitical risks.

The Swiss bank also revised its estimate for gold exchange-traded fund holdings, projecting levels to exceed 3 900 metric tons by the end of 2025, approaching the previous record of 3 915 tons set in October 2020.

"We maintain an Attractive view on gold and stay long the metal in our global asset allocation. Moreover, our analysis suggests a mid-single-digit percentage allocation to gold is optimal," UBS said in a note.

The bank highlighted geopolitical concerns and policy differences between the US administration and the Federal Reserve as key factors boosting gold's appeal, along with US President Donald Trump's stance favouring lower interest rates.

UBS expects central bank purchases of gold to remain robust at about 900 to 950 tons this year, or slightly below last year's near-record purchases of just above 1,000 tons.

"The key risk for gold is if the Fed is forced to raise rates due to inflation-related upside surprises," UBS added.

Meanwhile, Commerzbank has raised its gold price forecast to $3 800 per troy ounce by the end of 2026, up from its earlier projection of $3 600.

The bank now expects the Fed will cut interest rates by a total of 200 basis points by the end of next year, 50 basis points more than previously assumed.

Non-yielding bullion, often considered a safe-haven asset during periods of economic and geopolitical uncertainty and known to perform well in low-interest-rate environments, hit a record high of $3 673.95 on Tuesday and has gained more than 39% year-to-date.

Edited by Reuters

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