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HomeLatestUBS Raises Gold Price Forecasts Amid Strong Demand and Economic Uncertainties
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UBS Raises Gold Price Forecasts Amid Strong Demand and Economic Uncertainties

UBS has increased its gold price forecasts, citing robust structural support and resilient demand for the precious metal. The investment bank now anticipates gold prices will average $2,365 in 2024, an 8% increase from previous estimates, with a year-end target of $2,600. Looking further ahead, UBS projects gold prices will surpass $2,800 over the next two years, reflecting a positive outlook despite potential long-term easing.

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UBS also raised its long-term gold price forecast (in real terms) by 11%, from $1,750 to $1,950. This adjustment suggests that while prices may eventually ease, nominal gold prices, when adjusted for inflation, are expected to remain significantly higher, around $2,300.

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The bank attributes this upward revision to substantial purchases by the official sector and sustained physical demand, which have effectively created a higher trading range for gold. This structural shift has bolstered investor confidence in gold, supported by ongoing macroeconomic uncertainties and persistent geopolitical risks.

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Seasonal Outlook and Investment Opportunities

UBS forecasts a seasonally quieter period for the gold market in the coming months, particularly during the Northern Hemisphere summer when many market participants are on holiday. However, the bank sees this as an opportunity. According to UBS strategists, any setbacks in this period could present opportunities to build gold positions.

The second half of 2024 is expected to be marked by significant uncertainty, particularly with the upcoming U.S. elections. Event risks and rising concerns about the U.S. fiscal deficit could act as catalysts for higher gold prices later in the year.

Silver Price Forecasts Revised Upwards

In addition to gold, UBS has also revised its silver price forecasts. The bank now targets a 2024 year-end price of $36 for silver, with an average of $30.5 throughout the year. This revision reflects an anticipated outperformance of silver relative to gold.

UBS’s revised forecasts highlight a bullish outlook for precious metals, driven by strong demand, macroeconomic uncertainties, and geopolitical risks. Investors are encouraged to consider the potential opportunities presented by market fluctuations, particularly in the quieter summer months and the uncertain period leading up to the U.S. elections.

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