Gold could reach another all-time high in 2025 as investors turn to safe-haven assets amid expected market turbulence, UBS analysts have forecasted.
After surging by 27% in 2024, gold hit a record peak of $2,788 per ounce in October and recorded an average annual price of $2,389 per ounce—the highest ever. Despite a brief sell-off spurred by a shift toward riskier assets after Donald Trump’s U.S. election victory, the precious metal posted its strongest yearly gain since 2020.
In a client note released Tuesday, UBS analysts suggested that a stronger U.S. dollar and higher Treasury yields might weigh on gold prices during the first half of 2025. A rising dollar tends to make gold pricier for international buyers, while increased bond yields reduce the appeal of the non-yielding metal.
Recent gains in the dollar and Treasury yields have been linked to tempered expectations for Federal Reserve rate cuts. Robust economic data and concerns over President-elect Donald Trump’s proposed tariffs potentially reigniting inflation have led to reduced optimism for significant rate reductions.
Nevertheless, gold’s role as a hedge against inflation and a portfolio diversifier is expected to counteract these pressures, the UBS team noted. The analysts also highlighted that stock market volatility, driven by high concentrations in specific sectors and regions along with elevated equity valuations, could further bolster demand for the precious metal.
UBS predicts that sustained official gold purchases and growing interest from less rate-sensitive investors will drive prices higher. They have set a year-end target of $2,850 per ounce for 2025.
