According to UBS, the price of gold will hit $2,700 next year

 

According to UBS, the precious metals market will continue to rise despite opposition to gold near $2,400. They anticipate that gold prices will increase from their previous projections of $2,400 and $2,500 to $2,500 an ounce by September and $2,600 by the end of the year.

In its most recent 12-month prediction, UBS also projected that gold prices would hit $2,700 an ounce by June 2025.

Three explanations were offered by analysts for the increase in gold prices. The backing of the Federal Reserve is the first explanation. According to UBS, rate reduction will occur soon even though the U.S. central bank does not currently have any plans to do so because of the high pace of inflation.

Lower interest rates, according to analysts, may encourage Western investors to return to gold-backed exchange-traded funds and make gold investing more alluring. The CME FedWatch Tool’s market forecasts indicate that the Fed will probably maintain current interest rates through the summer, with a rate drop perhaps occurring in September.

Although we recognize that there is a great deal of uncertainty over the short-term trajectory of rates, we anticipate a decline in rates, which usually leads to ETF inflows, which is our next significant catalyst. — the analysts at UBS said.

This year, central banks are anticipated to continue purchasing large quantities of gold, which may contribute to maintaining high prices. Official gold reserves have increased by more than 1,000 tons annually over the last two years, according to figures from the World Gold Council.

As the theme continues, UBS projects that China will dominate the market.

While recent People’s Bank of China data show a moderation in gold purchases, Swiss trade data signal strong buying continuing in China. — as said by analysts.

 

The demand for gold is increased by geopolitical unrest, which affects bank forecasts.

“With the US election coming up, the wars in the Middle East and Ukraine still going on, and increased US-China trade tensions, we expect ongoing geopolitical uncertainty to support hedges like gold,” the experts stated.

UBS forecasts an increase in gold prices and advises purchasing at $2,300 per ounce when prices are falling.