UBS has increased its gold price forecast for 2025, predicting the metal could surpass $3,200 before stabilizing at higher levels over the long term. This revision marks a more optimistic outlook than the bank’s earlier estimates, influenced by several key market factors.
As of 10:30 GMT, spot gold (XAU/USD) was up 0.52% on the day, trading around $2,898.25.
Gold has already hit record highs in the first six weeks of 2025, driven by strong investor sentiment and sustained demand from central banks. Analysts point out that many investors remain underexposed to gold, leaving room for further price increases.
UBS strategist Joni Teves noted that financial markets have seen major shifts early in the year, with gold standing out due to its rapid gains and unusual market activity. In a research note, Teves explained that UBS revised its outlook based on recent market trends, bringing forward the expected gold peak to late 2025 and setting a higher price target than before.
The updated forecast also suggests that liquidity constraints could intensify gold price swings, making the market more sensitive to surges in physical demand. Additionally, investors who missed opportunities in 2024 may be quicker to buy on price dips, adding momentum to gold’s rally.
Despite raising its gold forecast, UBS left its outlook for other precious metals unchanged. Silver and platinum are expected to post stronger percentage gains than gold, benefiting from supply-demand trends. However, silver’s dual role as both a precious and industrial metal could lead to more price volatility.
Platinum is also positioned for gains but faces challenges due to lower market liquidity and longer investment cycles. Meanwhile, palladium could see short-term price spikes from supply constraints, though UBS does not expect a sustained rally, with prices likely to remain in a broad range.
