UBS Raises Gold Price Forecasts to $2,750 by 2024
UBS, a leading financial institution, has revised its gold price forecasts, predicting significant gains in the precious metal over the next year. The bank now anticipates gold to reach $2,750 per ounce by the end of 2024, up from its previous estimate of $2,600.
By mid-2025, UBS projects prices to climb even higher to $2,850 per ounce, and to $2,900 per ounce by the third quarter of 2025. This year alone, gold has seen a remarkable surge of 29%, continuously setting new records.
On September 24, gold hit an all-time high of $2,670 per ounce, driven by concerns surrounding economic growth, geopolitical tensions, and a weakening U.S. dollar. UBS highlights that historical trends show gold tends to rally by up to 10% in the six months following the first Federal Reserve rate cut, indicating the potential for further gains.
UBS analysts believe that in the next 6-12 months, gold prices will continue to rise due to increased investment demand, a decrease in U.S. real rates, a seasonal uptick in jewelry consumption, and ongoing central bank purchases. Despite the rapid price increase, UBS notes that pullbacks have been minimal, pushing investors to chase the market higher.
With the upcoming U.S. election contributing to heightened uncertainty, UBS foresees a rise in demand for gold as a safe haven asset. While Swiss gold export data suggests slower demand from China, UBS attributes this to quota restrictions rather than a decline in actual demand.
UBS recommends a 5% allocation to gold within a diversified USD portfolio, emphasizing the metal’s hedging qualities. The bank also expresses optimism regarding specific gold miners as a strategic investment opportunity.
In conclusion, with UBS’s bullish outlook on gold prices and the various factors driving its upward trajectory, investors may want to consider adding gold to their portfolios as a potential hedge against market volatility and economic uncertainties.