FX.co ★ UBS analysts anticipate gold gains, but market patience required

Gold prices could resume their upward trajectory in the second half of 2026 if the US Federal Reserve refrains from raising interest rates and central banks maintain a high pace of purchases. UBS strategists estimate that the metal traded at around $4,077 per ounce in late July 2026, having lost some ground due to declining interest in jewelry and significant capital outflows from gold-backed exchange-traded funds.

According to the World Gold Council, global demand for physical bars and coins fell to 307 metric tons in the second quarter, while net investment demand nearly halved to 262 tons. Market support against a deeper decline came from monetary authorities, who purchased 289 tons. Analysts emphasize that to sustain prices above $4,000, official demand must remain near 300 tons per quarter alongside a revival in investment inflows. The balance of supply in the market is also adjusting: an increase in production to 966 tons in the second quarter was partially offset by a decrease in recycling volumes to 326 tons.

The primary driver for the precious metal remains US monetary policy. As markets continue to price in the likelihood of an interest rate hike this year, short-term risks are skewed downward, potentially paving the way for a dip to as low as $3,850 per ounce. However, maintaining rates with subsequent cuts anticipated in early 2027 would weaken the dollar, reduce the cost of holding the metal, and renew interest from investors seeking inflation protection.

According to UBS’s long-term forecast, gold is expected to rise to $4,400 by September, reach $4,600 by December, grow to $5,000 by March 2027, and break above the $5,200 mark by June. The Swiss bank advises that any potential short-term decline to $3,850 should be viewed as a perfect opportunity for long-term buying.