Goldman joined by another key Investment Bank in hiking its gold price target
Published: 06:30 14 Apr 2025 EDTWritten by: Ian Lyall
After a blistering rally that’s seen gold notch a string of record highs, UBS has lifted its year-end price forecast by $300 to $3,500 an ounce, citing strong demand from central banks and investors, tightening supply and a flight to safety amid rising global uncertainty.
The Swiss bank’s latest note, published Monday, said it now expects central banks to buy 1,000 metric tons of gold this year, an increase from its earlier estimate of 950 tons.
Meanwhile, inflows from exchange-traded funds (ETFs) (a key driver of speculative demand) are forecast to hit 450 tons, up from 300.
UBS analysts said they are seeing a “broader reshuffling of global reserve portfolios” as countries seek to diversify away from the US dollar and hedge against mounting geopolitical risk.
One example: China recently gave the green light for insurance companies to invest in gold, potentially unlocking a new pool of institutional buyers. Retail interest is also picking up in parts of Asia.
The price of gold was hovering near $3,220.18 an ounce in trading on Monday, not far off its recent peak.
That’s up more than 20% since the start of the year and has outpaced both equities and Treasuries as investors brace for a possible economic slowdown and heightened volatility in the run-up to the US election.
Although physical supply has increased slightly, UBS said new mine output is unlikely to keep pace with surging demand.
The bank also flagged a “muted” response from scrap sellers, meaning prices are being driven higher by tight market conditions.
The new forecast puts UBS roughly in line with Goldman Sachs, which raised its own 2025 target to $3,700 an ounce on Friday.
Goldman sees gold trading between $3,650 and $3,950 depending on how recession risks evolve, though that upgrade is now old news.
UBS’s call is the freshest signal that banks are revisiting their assumptions about gold’s appeal.
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