- UBS raised its forecast for global gold prices, citing support and strong and resilient demand for the yellow metal.
- The investment bank now expects gold prices to average $2,365 in 2024, an increase of 8% from previous expectations, with an end-of-year target of $2,600. It also expects gold prices to exceed $2,800 over the next two years, reflecting strong expectations despite easing. Likely in the long term.
- “Our long-term gold price forecast (in real terms) was also raised by 11% to $1,950 from $1,750,” UBS said.
- He added: “This means that although we expect prices to eventually decline in the longer term, we now expect that after adjusting for inflation, gold prices should remain at much higher levels than before at around $2,300.”
- UBS strategists said the gold price rises were driven by significant purchases from the official sector, such as central banks, and sustained physical demand, which “effectively created a level shift higher in the gold trading range.”
- This shift has entrenched investors' views on rising gold prices, supported by ongoing economic uncertainty and geopolitical risks.
- Going forward, UBS believes the gold market is entering a more seasonally calm period, but it sees this as a buying opportunity specifically, and the bank's strategists believe the summer months could lead to weak price movements in gold, combined with the holiday season.
- “We believe that any setbacks during this period would provide opportunities to build gold positions,” the strategists said. “The second half of 2024 carries a lot of uncertainty, especially given the upcoming US elections, and event risks and growing concerns about the US fiscal deficit could act as catalysts.” “For gold prices to rise later in the year.”
