UBS expects the gold rally to continue as upward risks increase.

UBS remains bullish on gold, expecting prices to hit fresh highs this year as upside risks continue to build, according to strategist Joni Teves in a Thursday note.

Gold has faced pressure recently, as markets reacted to the inflationary effects of rising oil prices and the possibility of further interest rate hikes. Higher U.S. real yields and a stronger dollar have also weighed on the metal.

Despite this, Teves views recent declines as buying opportunities. He noted that the likelihood of gold extending its bull run over the next few years is increasing, particularly if weaker economic growth leads to fiscal or monetary stimulus—factors that would support higher prices. UBS reiterated that its overall outlook remains unchanged, continuing to expect new highs this year and encouraging investors to use pullbacks to build positions.

The bank now forecasts gold to average $5,000 per ounce in 2026, slightly lowered from its previous $5,200 estimate due to recent price adjustments after January’s peak. Projections for 2027 and 2028 remain unchanged at $4,800 and $4,250, respectively.

Teves also pointed out that speculative positions have been largely cleared out, while ETF outflows remain limited, creating room for renewed investor demand. Strong inflows into gold ETFs in China and steady domestic physical demand are expected to support imports through the second quarter. UBS believes the market is currently underinvested and sees any dip toward $4,000 as an attractive entry point. The bank also highlighted a structural shift, with more investors—both public and private—treating gold as a long-term strategic asset for diversification and portfolio protection.

For silver, UBS lowered its 2026 forecast to $91.9 per ounce from $105, though it still expects silver to outperform gold during rallies. However, Teves cautioned that silver’s industrial exposure makes it vulnerable to global economic slowdowns, which could weaken demand and sentiment. As a result, the gold-to-silver ratio may struggle to revisit earlier lows and is more likely to bottom in the 50–60 range rather than around 40.

Platinum and palladium face similar challenges from softer industrial demand, although potential supply disruptions—especially if Middle East tensions affect South African mining—could offer some support.

Sources: Vahid Karaahmetovic