UBS(US:UBS) Jin Shi Shu Ju·2025-12-30 05:11Core Viewpoint - UBS has raised its gold price target for the first three quarters of 2026 to $5,000 per ounce, with a potential increase to $5,400 if political or economic turmoil related to the U.S. midterm elections escalates [1][2]. Group 1: Price Predictions - UBS expects gold prices to decline to $4,800 per ounce by the end of 2026, an increase of $500 from the previous forecast of $4,300 [1]. - The bank has frequently adjusted its gold price expectations, indicating a temporary market correction rather than a fundamental decline in demand [3]. Group 2: Demand Drivers - Factors supporting gold demand include low real yields, global economic concerns, and uncertainties surrounding U.S. domestic policies, particularly related to midterm elections and increasing fiscal pressures [1]. - Central banks and individual investors have shown strong and accelerating buying trends, with global central bank net purchases reaching 634 tons in the first three quarters of 2025, significantly above pre-2022 averages [3]. Group 3: Investment Trends - Demand for gold bars and coins has exceeded 300 tons for the fourth consecutive quarter, indicating strengthened investor interest [4]. - Despite a 19% year-on-year decline in global gold jewelry demand, markets like China and India are showing seasonal recovery signs [4]. - UBS recommends investors maintain a moderate single-digit percentage allocation to gold in their portfolios, viewing it as an effective hedge and diversification tool [4]. Group 4: Future Outlook - UBS anticipates that interest rate cuts, declining bond yields, fiscal challenges, and political instability in the U.S. will continue to boost gold demand in the coming months [5].