UBS has raised its gold price forecast, now projecting that gold will reach $3,500 in 2025, with the rally expected to continue into 2026.
Even after a strong rally this year and broadly bullish sentiment across markets, UBS’s tracking indicators indicate there remains substantial upside potential for gold investments.
The bank expects demand to come from a wide range of buyers: central banks, asset managers, macro-focused hedge funds, and private investors. On the supply side, UBS sees mine production growth remaining modest and scrap supply constrained by the favorable price outlook. While severe economic stress could increase scrap volumes somewhat, the overall supply response is likely to be limited.
UBS cautions that a combination of rising demand and constrained supply could create liquidity strains in the gold market. In a globally volatile environment, such liquidity pressure can amplify price moves, producing sharper-than-expected swings.
Market participants should therefore be mindful of both the strong fundamentals supporting gold and the potential for transient dislocations if liquidity becomes thin. The interplay of sustained demand from multiple buyer groups and limited incremental supply is the central dynamic underpinning UBS’s higher price trajectory.