Gold roared into 2025, has hit several new highs in recent weeks and UBS believes it could go even higher.
In a fresh research note, the Swiss bank said the metal’s recent run-up nearly 10% in March alone to just over $3,100 an ounce – with a new high on Tuesday morning of over $3,148 – has been driven by a resurgence in investor demand as economic and geopolitical worries mount.
UBS expects gold to reach $3,200 in the coming months but says a spike to $3,500 is possible if tensions escalate or global growth slows further.
Exchange-traded funds (ETFs) linked to gold saw inflows of around 130 to 150 metric tons in the first quarter, reversing the trend of withdrawals seen a year ago. That marks the strongest quarterly demand since Russia’s invasion of Ukraine.
The bank notes that investors aren’t just chasing short-term safety. Central banks have been buying at a record pace for three years, and now private investors appear to be taking a longer-term view – looking to hedge against risks like stagflation, dollar weakness, or recession.
With US bond yields easing and worries over trade wars growing (stoked by comments from Donald Trump and Elon Musk, as well as weak US consumer data) gold’s traditional role as a “fear gauge” is very much back in focus.
UBS is keeping its core price forecast steady at $3,200 through early 2026 but says the balance of risks points upward. It recommends investors consider holding around 5% of a diversified portfolio in gold for stability during turbulent times.
In short, the recent rally isn’t just about panic buying. It’s a sign that investors are recalibrating for a world where uncertainty, not just inflation, might stick around longer than expected.
Source: Proactiveinvestors
