Gold has experienced a significant pullback recently due to inflation concerns and liquidity pressures stemming from the Iran war, yet bullish investors have not retreated. Swiss private bank Union Bancaire Privée (UBP) is taking advantage of lower prices to rebuild its gold positions and is maintaining its year-end price target of $6000 per ounce.
Paras Gupta, Head of Discretionary Portfolio Management for Asia at UBP, stated that as one-sided long positions in the market have been sufficiently cleared out, the bank has begun a phased approach to rebuilding clients' gold holdings. The current gold allocation has increased from a previously reduced level of approximately 3% to about 6% of discretionary portfolios, with plans for further increases. Gupta pointed out that structural demand drivers, including central bank purchases, fiscal deficit concerns, and geopolitical tensions, remain intact.
Although the gold price has fallen by approximately 10% since the outbreak of the Iran war, it still shows a net gain of around 80% for the year so far. Data from the World Gold Council indicates that global central banks were net buyers of 27 tonnes of gold in February, with Poland leading the way by adding 20 tonnes in a single month. Purchases at the central bank level continue to provide medium to long-term support for the gold price.
**UBP: Unwinding Concludes, Strategic Accumulation Begins**
Following the outbreak of war, surging energy prices pushed up inflation expectations, leading investors to sell gold to raise liquidity and cover losses in other markets, resulting in a sharp price decline. UBP had previously reduced its gold exposure significantly from around 10% to 3% to navigate the short-term volatility.
As the selling pressure subsides, UBP has initiated a rebuilding phase. Gupta noted that gold holdings among institutional and retail investors are now "fairly balanced," and the previously accumulated one-sided long positions have been largely cleared, creating healthier conditions for a new round of buying.
The position rebuilding is primarily focused on physically-backed gold ETFs. Gupta stated that the bank continues to forecast gold reaching $6000 per ounce by year-end, with the core rationale being that structural factors such as persistent central bank buying, ongoing fiscal deficit pressures in various countries, and global geopolitical uncertainties remain unchanged.
However, Gupta also acknowledged that further increases to their position require clearer signals. "We haven't got that clarity yet," he said, "The weekend's developments have only reinforced our need for more certainty." UBP manages client assets totaling approximately 184.5 billion Swiss francs.
**Inflation Risks Pose Short-Term Pressure, Long-Term Thesis Intact**
Gupta indicated that inflation risks are "materializing more quickly," which is weighing on gold in the short term—gold often underperforms when interest rate expectations are high, as it offers no yield.
Nevertheless, he emphasized that current macroeconomic expectations do not point towards a recession, suggesting that market pessimism towards gold may be overpriced. In his view, once the geopolitical direction becomes clearer and inflation expectations stabilize, the structural bullish case for gold will reassert its dominance.
UBP's view is not an isolated one. According to Bloomberg reports, ANZ Banking Group and Goldman Sachs have recently reaffirmed their forecasts for higher gold prices over the long term. Signs of recovery are also emerging at the ETF level—Bloomberg statistics show that after recording the largest monthly net outflow in five years during March, global gold ETF holdings rebounded by approximately 20 tonnes in April, indicating that bargain-hunting capital has started to flow in.
**Central Bank Purchases Persist, Underpinning Structural Demand**
A recent report released by the World Gold Council on April 2nd showed that global central banks were net purchasers of 27 tonnes of gold in February 2026, a noticeable increase from January and broadly in line with the 2025 monthly average of 26 tonnes. Cumulative net purchases for the first two months of the year reached 31 tonnes, lower than the 50 tonnes recorded in the same period last year.
The National Bank of Poland led the purchases, adding 20 tonnes in a single month—its largest monthly increase in nearly a year—bringing its total gold reserves to 570 tonnes, which now constitute 31% of its total reserves. The bank's Governor, Adam Glapiński, had previously announced a target to increase gold reserves to 700 tonnes, demonstrating a clear long-term intent to accumulate.
Regarding consistent buying, the Czech National Bank has been a net buyer for 36 consecutive months, raising its reserves to 75 tonnes; the People's Bank of China has increased its holdings for the 16th consecutive month; Kazakhstan added 8 tonnes, bringing its reserves to the highest level since January 2023; and Uzbekistan was a net buyer for the fifth month in a row, with gold now making up a substantial 88% of its total reserves.
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