UBS hikes gold forecast to $3,800 by 2025 citing geopolitical risks, Trump’s push for lower rates

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Dacharlie

UBS has raised its gold price (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) forecast to $3,800 per ounce by the end of 2025 and $3,900 by mid-2026, citing expectations of renewed Federal Reserve rate cuts amid soft U.S. labor data.

The investment bank also anticipates dollar weakness and ongoing geopolitical uncertainty, driving increased investor demand, with participants using the metal as a hedge.

"Diversification and having relevant hedges are crucial from a portfolio standpoint," UBS analysts said, adding that U.S. President Donald Trump's desire for lower policy rates also lifts gold's appeal.

"We maintain an attractive view on gold and stay long on the metal in our global asset allocation. Moreover, our analysis suggests a mid-single-digit percentage allocation to gold is optimal."

Gold (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) has resumed its march higher, with the metal now up 38% year-to-date to be just below its recent record high from earlier this month of $3,674/oz. It was trading +0.3% higher at $3,644.43 an ounce at the time of writing.

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