UBS Group has reaffirmed its positive and bullish stance on gold, forecasting that the international spot gold price could surge significantly to a target of $6,200 per ounce within the coming months.
According to Dominic Schnider from the team, "Commodity prices experienced considerable volatility at the end of January, yet precious metals, oil, and industrial metals all posted gains for the month. As this volatility begins to subside, we believe the fundamental outlook for commodities remains supportive of a bullish view, primarily driven by supply-demand imbalances, geopolitical shifts, and structural trends."
Schnider's projections include:
Gold is expected to resume its upward trajectory, potentially reaching as high as $6,200 per ounce by mid-year; Supplies of copper and aluminum are anticipated to become increasingly tight, which should support prices in the medium term, while structural drivers such as electrification underpin long-term demand; Brent crude oil is forecast at $65 per barrel by June and $67 per barrel by December, compared to the current price of $71.3 per barrel.
On the geopolitical front, UBS analysts highlighted that global macroeconomic uncertainty will remain a persistent theme for markets. In particular, escalating tensions between the U.S. and Iran have kept geopolitical risks in the Middle East elevated. Analysts noted, "The deployment of two aircraft carriers, fighter jets, and refueling aircraft in the region means the U.S. military buildup now exceeds the scale seen off the coast of Venezuela earlier this year, just weeks before Trump moved against Maduro. Whether an agreement with Iran can be reached remains to be seen, as recent military actions targeting Iran appear increasingly likely."
The macroeconomic environment also provides a solid foundation for continued gold price appreciation. UBS expects the Federal Reserve to maintain its accommodative monetary policy cycle, predicting two 25-basis-point interest rate cuts by the end of September. With inflationary pressures anticipated to ease further in the coming months, and the potential for a more dovish policy mix from the Fed in the second half of the year, a weaker U.S. dollar and lower real interest rates are set to enhance gold's investment appeal directly. UBS maintains that, despite recent strong employment data and somewhat hawkish signals from FOMC meeting minutes, the broader disinflation trend in the U.S. economy remains intact.
Structural imbalances in supply and demand fundamentals represent another key pillar supporting the bullish case for gold.
On the demand side, data from the World Gold Council shows that global gold demand surpassed 5,000 tonnes for the first time ever in 2025. UBS anticipates that global gold demand will maintain strong growth momentum, supported by stronger investment inflows, persistent and determined gold purchases by central banks worldwide, and mid-term structural jewelry demand driven by rising household incomes in Asia.
In stark contrast to robust demand, growth in global gold supply remains highly constrained. Assessments by consultancy Wood Mackenzie indicate that approximately 80 gold mines worldwide are expected to exhaust their current production plans by 2028. This implies that, even though historically high gold prices may stimulate some new exploration and development activities, the short-term supply elasticity for gold remains extremely limited, making it difficult to quickly fill the demand gap.
Schnider pointed out that by 2026, commodities will play a more significant role in investment portfolios, stating, "Within this asset class, we see particular opportunities in copper, aluminum, and agriculture, while gold remains a valuable tool for portfolio diversification."
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