UBS Cites 2 Reasons for Bullish Outlook on Gold, Estimates $3,700 per Ounce by End of September Next Year

UBS today pointed out that due to two factors—the gradually declining opportunity cost of holding gold and the continued rise in demand for gold—it maintains an "attractive" view on gold and has raised its target price to $3,700 per ounce by the end of September 2026.

In a press release issued today, the UBS Chief Investment Office (CIO) stated that since 2025, gold has outperformed all asset classes, with a year-to-date increase of 28%, surpassing stocks, bonds, G10 currencies, and even Bitcoin.

UBS explained that although recent factors such as changes in trade conditions, ongoing Russia-Ukraine peace talks, and weak U.S. labor data have caused gold prices to fluctuate within a narrow range, leading to a tug-of-war between bulls and bears, it remains optimistic about gold's medium-term upward trend.

UBS elaborated that the first reason is that the impact of tariffs and immigration policies has not yet been fully reflected in U.S. inflation data, and inflation remains sticky. On the other hand, growth below trend levels will prompt the Federal Reserve to restart interest rate cuts, and further weakening of the U.S. dollar will support gold prices. These two factors are driving down U.S. real yields, thereby reducing the opportunity cost of holding gold, which is a non-yielding asset—a positive for gold prices.

The second reason, UBS noted, is that in 2026, the major trends of de-dollarization, the Federal Reserve's independence, and U.S. fiscal sustainability, particularly the Supreme Court's ruling on Trump's reciprocal tariffs, will remain focal points for investors and will further boost investment demand for gold.

UBS stated that recent data from the World Gold Council shows that inflows into exchange-traded funds (ETFs) in the first half of this year reached their highest level for the same period since 2010. In light of this, UBS has raised its full-year gold ETF demand forecast from 450 tonnes to nearly 600 tonnes, with current holdings still below previous highs. Meanwhile, central bank purchases of gold are expected to remain strong, likely only slightly below last year's near-record levels.

UBS added that it currently forecasts global gold demand to increase by 3% to 4,760 tonnes in 2025, which would be the highest since 2011. The year-end target price remains unchanged at $3,500 per ounce, while the baseline target for gold prices has been raised to $3,600 per ounce by the end of March 2026, $3,700 per ounce by the end of June, and $3,700 per ounce by the end of September.