UBS Sees Gold Falling to $4,000 Before Rallying to New Highs

Gold could fall to $4,000. Who stands to gain from this?

Gold could fall to $4,000 per troy ounce before continuing its rise to new highs, according to forecasts by the Swiss bank UBS. On Friday, gold prices had already begun to rise, and the bank’s analysts expect that purchases by central banks and investors will support prices even with high interest rates in the US.

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Today, during European trading, December gold futures on the COMEX exchange rose by 1.26 per cent to $4,209.26 per troy ounce. The spot price of the metal stood at around $4,191 per ounce, according to Investing.

However, gold may soon fall back towards the $4,000 mark. According to UBS strategist Giovanni Staunovo, the market continues to be under pressure from high real yields on US bonds and a strengthening dollar. As gold does not generate interest income, its appeal to investors diminishes when yields on other assets rise.

What is supporting gold prices

Despite short-term risks, UBS believes that gold continues to benefit from strong long-term supportive factors. One of the main factors is central bank purchases. According to preliminary data, China acquired 23 tonnes of gold in September, whilst Uzbekistan purchased 7 tonnes. UBS expects global central banks to buy between 750 and 1,000 tonnes annually.

Additional demand is being driven by investors seeking to reduce their dependence on the US dollar and other financial assets. Among the supporting factors, UBS also cites concerns over rising public debt, sustained demand from China and a possible increase in purchases in India during the festive season.

According to Staunova, gold has remained resilient even amid a sharp rise in real yields. At the same time, in recent weeks, exchange-traded funds investing in the metal have continued to attract capital, despite a reduction in speculative positions in futures and options.

What will the price be in 2027?

The bank expects gold prices to rise further as expectations regarding US interest rates shift. If real yields begin to fall, pressure on the metal will ease.

UBS forecasts that by December 2026, gold will rise to $4,600 per ounce; by March 2027, to $5,000; by June, to $5,200; and by September, to $5,400.

The bank therefore anticipates an initial price correction, followed by a resumption of the upward trend. Staunovo considers a potential decline to be an opportune moment to increase investments in gold.

This story was translated with the assistance of artificial intelligence.The translation was also reviewed by the Logos Press editorial team.

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