Gold price drop is only short-term, according to UBS, gold price forecast to exceed $3,000 by 2025

UBS analysts are optimistic about the outlook for gold prices, asserting that the precious metal's rally is not over yet.

Gold prices are forecast to continue to increase strongly in the medium and long term. Photo: Reuters

In a report released on Wednesday, UBS raised its gold price forecast, saying prices will approach $2,800 per ounce by the end of 2024 and could reach $3,000 by 2025. The adjustment reflects broad demand for gold, coming from many different market segments, and negligible selling pressure.

This positive outlook is supported by a number of macroeconomic factors. According to UBS, monetary easing not only from the US Federal Reserve (Fed) but also from other central banks around the world will create a favorable environment for gold purchases. As interest rates fall, the cost of holding gold also decreases, thereby encouraging investors to allocate more to this precious metal.

Additionally, the weakening of the US dollar is also expected to support gold prices, as investors look for alternatives to holding traditional currencies.

Geopolitical tensions and the upcoming US election have added to the market uncertainty. Investors are looking to gold as a safe haven amid growing fiscal deficits and ballooning government debt. UBS analysts note that despite a strong consensus for higher gold prices, market positioning remains thin, opening the door to increased gold allocations in the coming quarters.

“We expect central banks and other official institutions to continue adding to their gold reserves,” UBS said. Many central banks are diversifying their reserves due to sanctions risks and geopolitical uncertainty, although the pace of gold purchases may slow.

Meanwhile, consumer demand for physical gold, especially in large markets such as China and India, is expected to remain stable despite rising gold prices.

Dung Phan (According to Investing)

Source: https://www.congluan.vn/ubs-gia-vang-giam-chi-la-ngan-han-du-bao-vuot-3000-usd-vao-nam-2025-post316217.html