UBS: gold sets target at $5,600 by 2026; volatility cited as entry point

Demand for asset diversification will drive gold prices to US$5,600(HK$43,680) per ounce by the end of 2026, with current market volatility offering strategic opportunities to build positions, Joni Teves, precious metals strategist at UBS Investment Bank, said on Tuesday. 

Teves said that the long-term upward trend in gold prices remains intact. Significant declines in real interest rates, the Federal Reserve's shift towards easing policy, and further escalation of geopolitical risks all contribute to a substantial rise in gold prices. 

She added that official sector gold purchases in the first quarter of this year are estimated to be slightly higher than last year, exceeding expectations. The positive trend of official sector gold accumulation is likely to continue.

With physical gold investment surging to offset a slight softening jewelry market, China’s domestic demand remained exceptionally resilient throughout the first quarter, said Teves.

Teves also stated that if the Federal Reserve's policy is more accommodative than the market currently expects, gold’s bull run could extend for years to come.

On silver, she said that while it is expected to follow gold's upward trend, gains may be weaker than gold's due to the weak economy affecting its industrial applications.

𝗗𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗧𝗵𝗲 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱 𝗔𝗽𝗽 ↓