UBS sees gold climbing to USD 6,200 as geopolitics, Fed cuts and tight supply reinforce the bull case.
Summary:
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UBS lifts conviction on gold, targets USD 6,200/oz in coming months
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Geopolitical risks seen staying elevated amid US–Iran tensions
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Fed easing cycle expected to continue, pressuring real yields
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Global gold demand tops 5,000 tonnes in 2025; central banks buying
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Supply constraints emerging as mine depletion looms by 2028
UBS has reiterated an Attractive stance on gold, forecasting a rise to USD 6,200 per ounce in the coming months, arguing that the fundamental pillars behind the rally remain firmly in place.
On geopolitics, the bank expects uncertainty to remain elevated. The US military build-up in the Middle East and a tightening deadline for a nuclear deal with Iran increase the probability of further volatility. While UBS notes that geopolitical shocks often have only temporary effects on broad markets, they tend to trigger sharp volatility spikes, conditions that typically boost demand for portfolio hedges such as gold.
Macro conditions are seen as equally supportive. UBS expects the Federal Reserve to continue easing, forecasting two 25bp rate cuts by end-September. A softer US dollar and declining real yields would reinforce gold’s appeal, particularly if inflation continues to ease and the Fed’s policy mix turns more dovish later this year. Even with firmer recent jobs data and some hawkish signals in FOMC minutes, UBS believes the broader disinflation trend remains intact.
Demand dynamics further strengthen the constructive view. According to the World Gold Council, total gold demand surpassed 5,000 metric tonnes in 2025 for the first time on record. UBS expects additional gains driven by stronger investment flows and sustained central bank purchases. Rising household incomes across Asia are also seen underpinning structural jewellery demand over the medium term.
On the supply side, growth appears constrained. While elevated prices may incentivise exploration, consultancy Wood Mackenzie estimates that around 80 mines will exhaust current production plans by 2028—suggesting limited near-term supply elasticity.
Taken together, persistent geopolitical uncertainty, a supportive Fed easing cycle, robust demand, and tightening supply, UBS argues the strategic case for gold remains compelling. The bank recommends investors consider an allocation of up to mid-single digits within a diversified portfolio as an effective hedge against market and macroeconomic risks
